At least it’s not 2008.
Almost 1,000 real estate professionals from the Richmond region gathered Tuesday to hear the latest prognosis on their industry at the annual VCU Real Estate Trends Conference.
Among the speakers was a panel of commercial real estate insiders who discussed the state of financing for commercial deals ranging from $2 million to $20 million. The four panelists, representative of firms currently active in the marketplace, suggested that the worst is behind us and that the commercial market is ripe with opportunities.
The mood has improved markedly from last year’s conference, said panel moderator John B. Levy of the Richmond-based investment bank of the same name.
Mr. Cohen’s statement is quite misleading. Most lenders have written down losses, but the write-downs aren’t even close to realistic market values. Take the Circuit City property as an example. Obviously the size of the property in this market was an exception, but the fact that it was sold for 82% less than the original loan should be telling. Most of these lenders are just now coming around to writing down these properties 5-10% a full 2 years after the market collapsed when a more realistic estimate would be in the 25-30% range. They simply don’t have the real capital required to write down these “assets” to their proper value.
Mr. Maher is right and wrong, profitable lending is about good underwriting. Unfortunately good underwriting does not include securitizing mortgages so lenders can take on more risk than they can handle. When CMBS’ come back, so will another bubble.
This is one of many points mentioned on Tuesday at the VCU RE Conference.
For a more detailed summary with actual quotes, go to the link below. There are 3 (very short) articles on the VCU RE conference.
http://www.examiner.com/real-estate-in-richmond/20th-annual-vcu-real-estate-conference-huge-success-part-1