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With over $1.5 trillion of commercial real estate loans maturing in the next five years, there is a big need for certified commercial real estate professionals to provide solutions. During this session, industry insiders including bankers, special servicers, and specialized brokers shared their personal insight on what to expect and how to deal with commercial troubled assets. Anyone involved in commercial real estate needs to understand how commercial lenders deal with troubled assets. Learn how to provide services for what will undoubtedly be the largest commercial real estate opportunity in recent history. Attendees heard from the following senior executives who represent the key sectors of commercial real estate: Bill Stolberg, CCIM, CPM, director, commercial real estate at Ocwen –Stolberg, director at one of the largest special servicers in the U.S., will share his insights into how special servicers deal with troubled assets and how their process differs from commercial banks. Jeff Johnson, executive vice president, PNC Bank — PNC Bank services over $300 billion of commercial real estate loans. Johnson will explain the processes and perspectives of national banks when dealing with troubled assets. Maryann Mize, CCIM, senior vice president at Charlotte State Bank & Trust — Mize will explain how troubled assets are viewed from a community bank’s perspective. Gary Ralston, CCIM, managing partner at Coldwell Banker Commercial Saunders Ralston Dantzler Realty — Ralston will explain the broker and investor perspective of troubled assets.
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An Update on Troubled Assets
Gary Ralston
During that time he guided the company's growth from less than $15 million in real estate assets to over $1.5 billion.
Gary holds the Certified Commercial Investment Member (CCIM), Society of Industrial and Office Realtors (SIOR), Specialist in Real Estate Securities (SRS), Certified Property Manager (CPM), Counselor of Real Estate (CRE) and Senior Certified Leasing Specialist (SCLS) designations and is also a Florida licensed real estate broker and certified building contractor.
Gary is a senior instructor for the CCIM Institute and a member of the board of directors of the CCIM Institute and CCIM Technologies, Inc. He is a Past President of the Florida CCIM Chapter. Gary is a full member of the Urban Land Institute (ULI) and a former Vice Chairman of the Small Scale Development Council. He is a member of the International Council of Shopping Centers (ICSC) and an instructor for the ICSC University of Shopping Centers at Wharton, the ICSC Executive Learning series and RECon Academy.
Gary holds a Masters in Real Estate and Construction Management from the University of Denver and serves on the Burns Counselor Board of the Franklin L. Burns School of Real Estate and Construction Management at the University of Denver. In 2007 was named an adjunct faculty member at the University of Denver and in 2011 he was named an adjunct faculty member at Florida Southern College.
Gary is a past member of the Executive Advisory Board of the Center for Retailing Education and Research at the University of Florida. He was inducted as a Hoyt Fellow (www.hoyt.org) in 2001. In 2011 Gary was appointed to the Board of Directors of the Central Florida Development Council (www.cfdc.org). Gary is a member of the Regional Economic Information Network of the Jacksonville Branch of the Federal Reserve Bank of Atlanta.
Gary M. Ralston, CCIM, SIOR, SRS, CPM, CRE, SCLS, is a managing partner of Coldwell Banker Commercial Saunders Ralston Dantzler Realty, LLC – the premier commercial services provider in Central Florida (Polk County). He is a recognized subject matter expert on retail and commercial properties. His consulting assignments include handling Florida REO properties for one of the nation’s largest special servicers of small commercial loans. He also serves as a principal of a retail build-to-suit development and investment company.
From the early 1990s to 2004 Gary was the president and a member of the board of directors of Commercial Net Lease Realty, Inc. (NYSE:NNN) the industry leader in single-tenant corporate net-leased real estate.
Gary M. Ralston
William Stolberg
Mr. Stolberg is the Director of Commercial Real Estate and Commercial Loan Servicing for Ocwen Loan Servicing, LLC. He is directly responsible for the management and oversight of Ocwen’s 60 person Commercial Loan Servicing Department including primary loan servicing, special loan servicing, and related asset management and REO disposition functions.
His team currently services approximately 5,000 performing and non-performing commercial loans and REO with a book value over $3.5 billion. Mr. Stolberg has held a Certified Commercial Investment Manager (CCIM) designation since 1996. While at Ocwen, Mr. Stolberg’s commercial servicing team has been directly responsible for the disposition of hundreds of REO properties exceeding $2.0 billion in value. As part of those sales efforts, Ocwen frequently seeks out and utilizes the brokerage and marketing skills of CCIM members across the US.
Mr. Stolberg has over twenty years of real estate asset management and disposition experience and also holds a Certified Property Manager (CPM) designation. He has a Masters Degree in Political Economy from University of Texas in Dallas.
Maryann Mize
Mize is the senior commercial real estate lender at a full-service community bank in Southwest Florida. She has been a community banker for more than 30 years, with the past 23 at the same bank. She serves in leadership roles in many community organizations, including Chairman of the Board at Peace River Regional Medical Center and past President of the Charlotte County Chamber of Commerce. Mize is also a CCIM Institute faculty member.
Jeff Johnson
Currently Mr. Johnson is responsible for commercial loan workouts and REO for PNC Bank. Prior to taking over the management of real estate loan workouts, he was the head of the PNC CMBS operations. Mr. Johnson was an original owner in Midland Loan Services which was acquired by PNC in 1998. Midland services over $300 billion of commercial real estate mortgages, and Mr. Johnson was responsible for asset management and special servicing. He was also instrumental in the development of one of the first CMBS conduit operations. Mr. Johnson received an MBA from Harvard University, where he was a Baker Scholar, and a BS from the University of Illinois. His hobbies include high altitude mountain climbing (having reached 6 of the 7 summits) and triathlons (successfully completing the Hawaiian Ironman twice).
An Update on Troubled Assets
With over $1.5 trillion of commercial real estate loans maturing in the next 5 years there is a big need for certified commercial real estate professionals to provide solutions. Industry insiders – bankers, special servicers and specialized brokers, share what to expect and how to deal with commercial troubled assets.
An Update on Troubled Assets
• Troubled assets overview– Gary Ralston
• Dealing with troubled assets in a special servicer world– Bill Stolberg
• Working with special assets at a community bank– Maryann Mize
• Troubled assets from a national bank perspective– Jeff Johnson
• Discussion / Q&A
Gary Ralston
During that time he guided the company's growth from less than $15 million in real estate assets to over $1.5 billion.
Gary holds the Certified Commercial Investment Member (CCIM), Society of Industrial and Office Realtors (SIOR), Specialist in Real Estate Securities (SRS), Certified Property Manager (CPM), Counselor of Real Estate (CRE) and Senior Certified Leasing Specialist (SCLS) designations and is also a Florida licensed real estate broker and certified building contractor.
Gary is a senior instructor for the CCIM Institute and a member of the board of directors of the CCIM Institute and CCIM Technologies, Inc. He is a Past President of the Florida CCIM Chapter. Gary is a full member of the Urban Land Institute (ULI) and a former Vice Chairman of the Small Scale Development Council. He is a member of the International Council of Shopping Centers (ICSC) and an instructor for the ICSC University of Shopping Centers at Wharton, the ICSC Executive Learning series and RECon Academy.
Gary holds a Masters in Real Estate and Construction Management from the University of Denver and serves on the Burns Counselor Board of the Franklin L. Burns School of Real Estate and Construction Management at the University of Denver. In 2007 was named an adjunct faculty member at the University of Denver and in 2011 he was named an adjunct faculty member at Florida Southern College.
Gary is a past member of the Executive Advisory Board of the Center for Retailing Education and Research at the University of Florida. He was inducted as a Hoyt Fellow (www.hoyt.org) in 2001. In 2011 Gary was appointed to the Board of Directors of the Central Florida Development Council (www.cfdc.org). Gary is a member of the Regional Economic Information Network of the Jacksonville Branch of the Federal Reserve Bank of Atlanta.
Gary M. Ralston, CCIM, SIOR, SRS, CPM, CRE, SCLS, is a managing partner of Coldwell Banker Commercial Saunders Ralston Dantzler Realty, LLC – the premier commercial services provider in Central Florida (Polk County). He is a recognized subject matter expert on retail and commercial properties. His consulting assignments include handling Florida REO properties for one of the nation’s largest special servicers of small commercial loans. He also serves as a principal of a retail build-to-suit development and investment company.
From the early 1990s to 2004 Gary was the president and a member of the board of directors of Commercial Net Lease Realty, Inc. (NYSE:NNN) the industry leader in single-tenant corporate net-leased real estate.
Gary M. Ralston
10 Year US Treasury Rate
Source: http://www.multpl.com/interest-rate/
10-2012
Case Shiller National Home Price Index Adjusted for Inflation
Source: www.multpl.com/case-shiller-home-price-index-inflation-adjusted/
Fitch Ratings-New York-July 29, 2011
“Fitch Ratings cumulative default rate for fixed-rate CMBS increased to 12.9% as of the end of the second quarter 2011. The represents a 228 basis point increase compared to year-end 2010.”
Headlines• “The payoff rate for maturing office
loans (CMBS) hit a multi-quarter low of 40% in the second quarter, and the loss severity rate increased to 39% from 30% in the prior quarter” – S&P
• “1 in 8 banks at risk” -- Trepp Capital Adequacy Stress Test
• The delinquency rate for U.S. commercial real estate loans in CMBS is 10% -- Trepp
Troubled Assets – 5 Alternatives– Troubled assets are typically loan to value >
100% (or at a minimum LTV > 80%)
1. Principal reduction to 80% LTV and loan extension
2. “Pretend and Extend”
3. Foreclosure -> OREO (a/k/a REO)
4. Short sale (property in foreclosure)
5. Loan sale (property may or many not be in foreclosure)
An Update on Troubled Assets
• Troubled assets overview– Gary Ralston
• Dealing with troubled assets in a special servicer world– Bill Stolberg
• Working with special assets at a community bank– Maryann Mize
• Troubled assets from a national bank perspective– Jeff Johnson
• Discussion / Q&A
William Stolberg
Mr. Stolberg is the Director of Commercial Real Estate and Commercial Loan Servicing for Ocwen Loan Servicing, LLC. He is directly responsible for the management and oversight of Ocwen’s 60 person Commercial Loan Servicing Department including primary loan servicing, special loan servicing, and related asset management and REO disposition functions.
His team currently services approximately 5,000 performing and non-performing commercial loans and REO with a book value over $3.5 billion. Mr. Stolberg has held a Certified Commercial Investment Manager (CCIM) designation since 1996. While at Ocwen, Mr. Stolberg’s commercial servicing team has been directly responsible for the disposition of hundreds of REO properties exceeding $2.0 billion in value. As part of those sales efforts, Ocwen frequently seeks out and utilizes the brokerage and marketing skills of CCIM members across the US.
Mr. Stolberg has over twenty years of real estate asset management and disposition experience and also holds a Certified Property Manager (CPM) designation. He has a Masters Degree in Political Economy from University of Texas in Dallas.
An Update on Troubled Assets
• Troubled assets overview– Gary Ralston
• Dealing with troubled assets in a special servicer world– Bill Stolberg
• Working with special assets at a community bank– Maryann Mize
• Troubled assets from a national bank perspective– Jeff Johnson
• Discussion / Q&A
Maryann Mize
Mize is the senior commercial real estate lender at a full-service community bank in Southwest Florida. She has been a community banker for more than 30 years, with the past 23 at the same bank. She serves in leadership roles in many community organizations, including Chairman of the Board at Peace River Regional Medical Center and past President of the Charlotte County Chamber of Commerce. Mize is also a CCIM Institute faculty member.
Community Banks
• Play an important role in CRE:• Working Through Troubled Assets• Access to Capital for CRE
Community Banks
• Facts• Differences• Opportunities
Community Banks
• Facts• Differences• Opportunities
Overall: low Loan
To Deposit Ratio’s means
money to lend,
including CRE
CRE Lending
Overall is up
CRE Troubled
Assets Overall is declining
Source: fdic.gov
Institutions of less than
$10B represents 90% of # of institutions
Source: fdic.gov
CRE Historic Basis:
Communty Banks have had a role
Source: fdic.gov
Communty Banks: CRE represents
30%
Community Banks
• Facts• Differences• Opportunities
Community Banks
• Facts• Differences• Opportunities
Community Banks
• Play an important role in CRE:• Working Through Troubled Assets• Access to Capital for CRE
An Update on Troubled Assets
• Troubled assets overview– Gary Ralston
• Dealing with troubled assets in a special servicer world– Bill Stolberg
• Working with special assets at a community bank– Maryann Mize
• Troubled assets from a national bank perspective– Jeff Johnson
• Discussion / Q&A
Jeff Johnson
Currently Mr. Johnson is responsible for commercial loan workouts and REO for PNC Bank. Prior to taking over the management of real estate loan workouts, he was the head of the PNC CMBS operations. Mr. Johnson was an original owner in Midland Loan Services which was acquired by PNC in 1998. Midland services over $300 billion of commercial real estate mortgages, and Mr. Johnson was responsible for asset management and special servicing. He was also instrumental in the development of one of the first CMBS conduit operations. Mr. Johnson received an MBA from Harvard University, where he was a Baker Scholar, and a BS from the University of Illinois. His hobbies include high altitude mountain climbing (having reached 6 of the 7 summits) and triathlons (successfully completing the Hawaiian Ironman twice).
An Update on Troubled Assets
• Troubled assets overview– Gary Ralston
• Dealing with troubled assets in a special servicer world– Bill Stolberg
• Working with special assets at a community bank– Maryann Mize
• Troubled assets from a national bank perspective– Jeff Johnson
• Discussion / Q&A
Discussion
Questions & Answers
Gary RalstonBill Stolberg
Maryann MizeJeff Johnson
