Liberty SBF Speaks on Lenders Panel [News]

March 11, 2015

In Atlantic City, NJ, Liberty CEO Alex Cohen spoke on a panel of nine experts in the CRE industry that included lenders from the likes of a non-profit micro lending organization, KeyBank, Bank of New York Mellon to a host of community bankers. The panel took place at the MBA New Jersey Commercial Mortgage Conference on Tuesday, March 10. Cohen introduced Liberty SBF to the audience and illustrated the type of lending Liberty SBF does by talking about some recently closed deals, including a Bridge Loan the company recently closed in Columbus, OH that took out ballooning mortgages for an experienced sponsor.

He also fielded questions from moderator, Ronald M. Shapiro, from the Center for Real Estate Studies at Rutgers Business School. Cohen spoke about recruiting talent for the massive growth Liberty SBF has experienced in the past year and how the company works with brokers to get deals done.

“There’s about $1 trillion in ballooning debt including $300 billion in CMBS coming due from the last cycle and about a 25% of it is underwater,” said Cohen. “We designed products to help that 25% get financing.”

While the recovery hasn’t been as robust as some would like, if you take a look at it from the perspective of commercial real estate, it’s one heck of a comeback. According to an article on CNBC, economic factors are coalescing to drive recovery mode in the sector. The housing market is up, jobs are coming back (more jobs were added in 2014 than any other year so far since 2000), consumers are optimistic and interest rates and inflation are low. The prediction is that the best is still yet to come.

In an article on GlobeSt.com, David Lynn, CEO of Everest High Income Property discusses which asset classes he believes will grow in 2015. Lynn said, “Multifamily will continue to be strong, particularly in urban markets due to demand driven by the Millennials as they form new households. Industrial will continue to improve based on firm economic activity—as will retail. Office will gain momentum along with general business health. People need to be around other people—and like to be—so work environments will continue to thrive in physical locations where ideas and cooperation foster business growth.”

The latest jobs report showed that unemployment fell to 5.5 percent in February and that 295,000 jobs were added to the economy, according to the NYT. However, wages have barely budged throughout the nearly six-year-old job recovery. According to the report, there is talk that the Federal Reserve will see the falling jobless rate as a sign of strength that justifies an imminent interest rate increase. The article notes that this would be a mistake, however, because raising rates in the near term would lock in high unemployment among minorities and wage stagnation.

The article continues on that the Fed should hold off raising rates until wages are growing in tandem with inflation and productivity. In the meantime, it should use its regulatory tools to ensure that low-interest rate credit is put to productive uses.

The self-storage industry has recorded tremendous growth over the past year and occupancy rates have continued to rise, according to an article by GlobeSt.com. And the sector’s solid performance has generated lots of investor interest, according to a new report. “This is the best shape the industry has ever been in,” said Marc A. Boorstein, principal of the company that published the report. “These companies used to run their facilities at 85% occupancy, and now they are at 90% and above.”

In other property sector news, an article by National Real Estate Investor notes how low vacancy and limited construction have boosted medical office building sales. The article says that investment sales are at their highest and new construction is still falling behind demand. Vacancy rates for medical office buildings nationally are at the lowest point since the recession at 10.9%. Ten-year lease terms and high move-out costs, along with fewer construction starts due to Affordable Care Act concerns, have put sellers in a great position for this year and for the forseeable future.

8+1 (That’s 9) Stories You Need To Read In CRE Right Now

• Stream’s cool acquisition shows signs of hot industrial market

• Economists Offer Their Best Advice for Today’s CRE Investor

• Which Online Money Transfer Service Is the Most Secure?

• ‘All The Ingredients Will Be in Place’ by September for Rate Hike, Moody’s Zandi Says

• Bank CRE lending rose $104B in 2014

• The rise of commercial real estate crowdfunding

• Regional and mid-sized banks outpace larger competitors in growing CRE loan portfolios

• Seeking yield, Canadians invest in U.S. CMBS

• Retail power centers vs. Class B and C space