| Posted by david on January 16, 2010 |
Ranch and recreational brokers met in Denver at the RLI Spring meeting held in conjunction with the National Western Stock Show. The top Realtors who sell ranches, recreational properties and commercial developments presented properties and business opportunities ranging from gas stations in South Park priced at $289,000 to 92,000 acre ranches with grazing permits for over 5,000 head of cattle. Trophy trout fishing recreational properties featuring cope saw log homes and creek frontage and Boone and Crockett trophy mule deer, elk and mountain sheep hunting ranches were among the properties presented. Prices fro these properties ranged from under $500,000 to over $15 million.
Buyers were represented looking for properties up to $40 million. End of the road ranch properties controlling access to thousands of acres of National Forest land for hunting fishing ATV and motorcycle recreation featuring aspen covered mountain valleys and spectacular views were among the offerings.
Commercial properties such as ministorage, restaurants and dude ranch developments were also included. Jason Pavlovic with Commercial Note Brokers presented potential note buyers and Realtors with the opportunity to sell
notes backed by ranches, commercial properties and developments using the Commercial Note Brokers system.
Opportunities exist for banks in rural areas with these commercial real estate notes to reach a wider market to help reach a solution to their balance sheet problems and Commercial Note Brokers can help. Commercial Note Brokers’ expertise lies in showcasing these notes online to a wide variety of potential investors looking to buy commercial notes. This will not only help banks get some of these toxic assets off their books, but will also allow for buyers to make an investment that is backed by some form of commercial real estate and/or promissory note.
| Posted by david on January 8, 2010 |
The commercial real estate market has been and will continue to decline for a number of years. Don’t believe me? Start reading the newspaper about the number of businesses going under – especially retail. When a retail business goes under, it usually means that the store in which the retail business operated is no longer going to be occupied. Also, check the FDIC website. That government organization seems to be taking over 3-4 new banks a week! Think it’s pretty scary? You bet. This will continue to happen for many more years. Even solid tenants who haven’t missed payments may have a balloon payment that they won’t be able to pay and no bank will refinance the note because the actual value of the property has decreased. This is a serious problem and these days, banks have a ton of commercial notes that they are trying to move as the loans have defaulted or they will default in the near future.
I just read an excerpt from an article on Reuters about how the commercial real estate market is manageable. Jeffrey Lacker is the president of the Richmond Federal Reserve and he said the following: “My overall take is that, knock on wood, it’s a manageable problem,” (http://tinyurl.com/yk7jsed). You know what’s scary? Such whimsical statements do not inspire faith and confidence in me. Tons of banks are failing left and right and this guy says one of the most hackneyed statements of all time to assure people that the commercial real estate mess will blow over. Commercial bank notes are flooding the market at record proportions. This could be a manageable problem if we are prepared. But are we?
| Posted by stuart on January 6, 2010 |
Dear Mr. Bank President or Distressed asset manager:
How is 2010 looking for you?
The New Year has promise for many changes. One thing that has not changed is the continuing pressure on private equity holders of small and midsize banks that engage in commercial lending. As the FDIC is forcing up Tier 1 capital requirements, the bank’s shareholders stand to lose everything.
A bank has limited ways to raise this capital. One is of course increased shareholder equity participation. The other is to liquidate troubled loans. The problem is that the bank cannot find the buyers who would buy one or two troubled loans at a market rate that is acceptable to the bank. The pooled fund managers that are the last resort for selling these assets will want everything or nothing, and demand prices that will guarantee them an 80% return on investment and guarantee that the bank takes an impossible hit to the bank’s capital. This puts the bank in a bad position of having to alienate good customers with longstanding relationships, do nothing in the hopes the commercial market will improve, or take over the property as OREO real estate and hope to sell it in a few years…
Commercial Note Brokers has a better way to preserve bank capital while disposing of troublesome loans.
We have identified buyers for these distressed notes, whether they are secured by land, multi-family projects, construction loans, commercial investor loans or underperforming retail and office properties. Our system allows the banks to be selective in which loan is offered while maintaining confidentiality. In other words, the bank can
‘cherry pick’ which individual loans they want to entertain offers for, and allow us to perform the buyer qualification and do the marketing. The bank is under no obligation to accept any offer, confidentiality will be strictly maintained, and the bank has nothing to lose from trying us out.
| Posted by stuart on December 29, 2009 |
Many Colorado banks are being notified by the FDIC of the need to improve their businesses.
The major problem for these financial institutions and many more which are on the list of FDIC Enforcement Decisions and Orders and those not yet served with cease and desist orders is the fact that their portfolios of loans backed by commercial real estate are not being realistically valued.
The FDIC is expecting banks to have total risk-based capital at least equal to 11.5 percent of total risk-weighted assets after making allowances for loan and lease losses. This is a difficult position for many smaller banks with sub performing or doubtful commercial real estate backed loans. As lease rates have fallen and vacancy rates have risen borrowers are increasingly finding themselves unable to perform on the obligations of their notes.
Bankers have traditionally foreclosed on the collateral securing this debt. After a property marketing time of 90 to 120 days most properties would sell and the bank would either take a small loss or perhaps profit from an increase in market value. Expenses involved in these REO transactions ranged from 10 to 12% of the value of the property.
Depressed market conditions for many of these distressed real estate assets show marketing times of years not months in some sectors and areas. This is especially prevalent in land development or construction loans for uncompleted projects.
There is a great demand for the notes held by banks by investors. The problem of finding specific notes for sale has stymied may of these investors. Commercial Note Brokers (CNB) has developed a web based marketing system that can aid banks in disposing of these loans. Thereby the bank can clear their balance sheets, remove the loan loss and lease uncertainty, and battle bank failure aggressively.
| Posted by david on December 26, 2009 |
Banks all across the country have got to be worried. Why? Well, in recent years, banks had authorized a lot of loans for the commercial real estate industry and now, a lot of these notes are under-performing and some are not performing at all. In an attempt to clean up all the underwater and non-performing commercial loans – ie, bad debt, the FDIC has started taking over banks. You may have read a few articles here and there regarding this industry but if you haven’t, the news will soon be covering this with the same intensity it covered the residential real estate recession. With the strict credit markets right now, banks are having a hard time finding qualified customers to borrow money – which, as we all know, is the primary way banks make money.
So what can a typical bank do to combat this scenario? How can banks reach investors to help clean their up their books and take off a lot of their bad debt? Until recently, hedge funds were helping out banks with their commercial real estate debt by buying pools of bad loans. Some of these pools contain performing notes that the bank did not necessarily want to give up. Also, these portfolios of commercial real estate notes were selling sometimes as low as $0.20 on the dollar! Banks shouldn’t have to sell all their notes at this steep of discount. Bank institutions should have the ability to pick and choose which loans they want to get off their books and they should be getting more for their notes.
Now, banks have the opportunity to simply pick and choose which loans they wish to get off their books. Commercial note brokers now have given banks an opportunity to reach not only hedge funds but also the everyday investor who is looking for these commercial bank notes for sale. By helping banks clean up their debt, banks will be able to lend again.
