I attended Bisnow's Second Annual Real Estate Summit at the InterContinental Hotel this morning. It was a packed house, with a lot of familiar faces and some great speakers, including Steve Fifield, Mike Reschke, Gerry Nudo and the keynote speaker, Neil Bluhm. (Hearing Bluhm speak is a big deal to many of the real estate cognoscenti, because he does not appear as frequently on the scene as a Sam Zell or a Donald Trump, even though he is also a billionaire and every bit as savvy.)
What did I learn that I can pass on to you, along with my thoughts? (I am intentionally not attributing comments to any speaker here.)
- Several panelists don't see any turnaround here in commercial real estate until at least 2013.
- Lenders are dying to replaced paid off capital with new loans. I'm not seeing as much of that. But I am seeing life that didn't exist before either. I guess lenders and borrowers have different perspectives too.
- If a bank is asking for more money or capital, it is probably to increase the bank's rating of the loan so it can retain fewer reserves with respect to that loan.
- If your lender isn't calling you every week to do deals.... (Really?)
- Somewhat contradictorily, lenders are looking for construction loans to do, but then they don't really want any risk on the deal over $25 million, and they also do not want to be participants in someone else's loan unless goodies can be spread around.
- This is a once in a lifetime opportunity to do low interest, ten year deals with insurance companies, and you should do everything you can to get your LTV to a point where you can do those deals. Moreover, when you need to discuss something to the lender someone is actually there who can listen.
- CMBS spreads are not changing any time soon.
- Casino financing can be difficult because many lenders do not understand the difference between local/regional casinos and Las Vegas. Local operations are finite in terms of licensing and people go there like they would to a sporting event, while Vegas is an event, with virtually unlimited licensing and travel costs. That is why Vegas was hurt so bad in this recession.