"Capitalism without capital is nothing but an `ism.' " That's what keynote speaker Jack Kemp -- quoting Jessee Jackson -- told the approximately 500 attendees at the 1996 CCIM National Conference, held this June in Reston, Va., and co-sponsored by NATIONAL REAL ESTATE INVESTOR.
"Capital Power" was the theme of this year's meeting of the Commercial Investment Real Estate Institute, which confers the Certified Commercial Investment Member (CCIM) designation. The program was designed to put attendees in touch with that power.
Two-hour marketing and businesssessions allowing CCIMs the opportunity to share business opportunities started each day's events.
So important is technology to conducting business now that a full day was devoted to "How to Double Your Income with Today's Technology." Panelists talked about how they use technology to find and obtain business and market properties, and one speaker admitted "If I lose my laptop, I would be out of business."
You might say that "capitol power" and "capital power" collided when luncheon speaker Rep. Mark Foley, R.-Fla., a broker before entering public life, received his CCIM pin, having passed the exam earlier in the week. He was one of 218 professionals receiving their designations during the meeting.
Knowing which financial tools are available, who needs them and how to access them are essential to the real estate industry. To this end, "Commercial Real Estate Finance: Understanding its Capital Power" gave helpful hints of ways commercial real estate practitioners can work with lenders to ensure successful transactions.
Panelist John Levy of John B. Levy & Co., Richmond (and NREI's Financing Today columnist) talked about two financial tools that can help close stalled: bridge loans and circling a rate.
A bridge loan is useful for "the fish that almost got away," Levy said. This loan to finance an acquisition helps facilitate a closing, can be done quickly, will preserve a broker's commission and "draws attention that you bring real value," he added, saying that lenders like Heller, GE Capital and Nomura Direct provide this type of short-term money.
Circling a rate is helpful when rates start moving up, Levy said, "when a lender likes a deal but won't fix a rate until loan committee." This tool, that binds a borrower and lender to a fixed rate and could save a borrower 1/2%, is available from lenders such as Prudential, TIAA and Northwest Mutual.
Anthony Washington of AMI Capital Inc. in Bethesda, Md., talked about DUS lending as a financing tool. As one of 25 delegated underwriting and servicing partners with Fannie Mae, Washington said, AMI placed $272 million in 1995.
Reilly Shaughnessy, with First Union National Bank in McLean, Va., talked about banks as lenders for real estate. "Regulators take a coldhearted look at real estate loans," he said. "The underwriting process is cold and steely-eyed." Continuity and integrity of cashflows are important to banks, and Shaughnessy said First Union won't look at loans under $3 million, but will go up to $60 million to $70 million. These credit lenders look at the project as well as the sponsor. Other banks currently lending for commercial real estate are Wells Fargo and Mellon.
Nancy Davis of The Money Store Investment Corp. in Sacramento, Calif., explained niche loan products, especially SBA loans. In what Davis described as "soup to nuts" financing, "one loan can include real estate as well as inventory and equipment."
"Underwriting has slipped every year since '91," Levy said. "Lenders are more reasonable and more interested in doing deals."
Transitioning from a transaction-driven to a fee-based career was covered in "An Alternative to Commissions: Your Road Map to $ucce$$." And rounding out the program were two sessions on project development. Trends in adaptive reuse and military base closings were covered, and case studies for industrial, office and mixed-use projects were presented, providing insight into the future of development projects.