January 5th, 2009 12:53 EST
Want Some Business Advice on Commercial Real Estate?
Another shoe is about to drop in real estate. We have heard about the sub-prime loans and the take down of the banks and the institutions that have been holding that paper, but what we haven`t heard about are the commercial properties that have so far escaped the damage that is plaguing the residential marketplace.
With the bankruptcy of Mervyn`s, Linens and Things, and a host of other retailers, (http://tinyurl.com/73d67c) retail real estate is going to be coming available in giant proportions.
The impact on commercial real estate therefore, has yet to be felt, but the wave is coming. Many of the commercial real estate loans are held by the small community and regional banks. These banks have so far escaped the disaster that is plaguing the other larger banks because they have generally more conservative in the types and amounts of loans that they provided.
Their underwriting criteria were in many cases more old-fashioned. They would offer some business advice on this topic: stick to what works. Down payments and monthly mortgage payments that are consistent with the borrower`s take home pay are necessary. But at this point in the game, who could tolerate a Monday Quarterback calling the plays? (http://www.iht.com/articles/2008/03/03/business/rtrcol05.php)
By in large, not much money has been allocated to these banks for rescue or bailout. Almost none has been set aside for the hard money or equity lenders. And the community banks should prepare themselves for the next wave of trouble. If this describes you, or your company, please contact our office right away.
In the spirit of providing some business advice on the next shoe that is about to drop, here are few recommendations:
* If you are in the commercial real estate business, now is a great time to buy.
* If you are in the banking business, now is a great time to be careful.
* If you are in the real estate syndication business, now is a fantastic time to start pooling money.
* Real estate syndicators should start acquiring assets because assets are about to become available in record proportions.
* If you are an investor, now is the time to start buying.
* If you are unsure, stay on the sidelines.
A few more items:
* I am preparing to put together a real estate syndication to acquire distressed assets. If you would like to participate with us, please contact our office.
* My colleagues and I have experience with the federal government and loan programs. If you believe that you should be considered for a bailout under the "Trouble Asset Recovery Program" (TARP), then call us so that we can make an evaluation of your situation. There just might be some federal dollars waiting for you.
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About Joel G. Block, President of Growth-Logic, Inc.
Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenue and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker, advisor and faculty member of the iLearningGlobal community. To bring Joel into your company, please visit http://www.joelblock.com or http://www.growth-logic.com. Also, be sure to check out our newest project: a blog to organize the blogs that cover entrepreneurship - http://www.entrepreneur-hub.com. And finally, for film makers: http://www.filmfundingblog.com - our newest project.