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Commercial Real Estate and Hotel Industry: What is the Smart Money Saying and Doing? January 26, 2009. Commercial Real Estate and Hotel Industry: What is the Smart Money Saying and Doing?. Moderator Bidjaan Kassam – CBRE Hotels Dallas, VP Panelists

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commercial real estate and hotel industry what is the smart money saying and doing january 26 2009
Commercial Real Estate and Hotel Industry:

What is the Smart Money Saying and Doing?

January 26, 2009

commercial real estate and hotel industry what is the smart money saying and doing
Commercial Real Estate and Hotel Industry: What is the Smart Money Saying and Doing?

Moderator

  • Bidjaan Kassam – CBRE Hotels Dallas, VP

Panelists

  • Perry Molubhai – Atlantic Hotel Group, Managing Director
  • David Copeland – CBRE Retail Services Dallas, VP
  • Steve Holt – One World Bank, CEO
  • Karam Ali – Alliance Originator
commercial real estate and hotel industry what is the smart money saying and doing1
Commercial Real Estate and Hotel Industry: What is the Smart Money Saying and Doing?
  • Hotel Market 2009 Forecast
  • Hotel Owner Perspective
  • Retail Market Overview
  • Lending in 2009
  • Investing in Alliances
  • Question and Answer
david copeland vice president cb richard ellis retail services dallas texas

David CopelandVice PresidentCB Richard Ellis Retail ServicesDallas, Texas

RETAIL MARKET OVERVIEW

slide13

REGIONAL

ISMAILI BUSINESS CONFERENCE

One World Bank

2009

Steve Holt, President and C.E.O.

slide15

What can Uncle Sam do for you . . .

TARP, CPP, Tax Relief and the alphabet soup

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide16

“Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” – Groucho Marx

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide17

What’s the Good News?

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide18

Panera Is One Restaurant Looking For Positive Things In 2009

January 22, 2009

“Panera Bread Co., the chain of 1,250 bakery-cafes, plans to take advantage of its debt-free balance sheet and the U.S. real estate slump to open as many as two locations a week in 2009, said Chief Executive Ronald Shaich.”

http://www.stltoday.com/stltoday/business/stories.nsf/developmenteconomy/story/53728525613A661C8625753F0016CFBC?OpenDocument

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide19

Consumer Prices Fall Again In December

January 16, 2009

Consumer Prices Fall For Third Month In December - For the third month in a row consumer prices declined for the slowest increase of prices in 50 years. The CPI (consumer price index) fell .7% in December. Excluding energy and food, which have the greatest impact on the number, the CPI was nearly flat. So I’m assuming that the continued drop in gas contributed to the decline. While this does not mean we’re out of the woods, it does bode well for those with money to spend. Greater purchasing power can often spur additional consumption, particularly if the expected stimulus plan goes into effect in the first quarter.

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide20

Fox Reports Credit Markets Beginning to Thaw

January 15, 2009

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide21

30-year conventional mortgage rate hits 5.10% during week of January 2, 2009, the lowest since 1972

  • Refinancing activity is up 137% from a year ago.
  • Mortgage applications are up 62% from a year ago
  • Home sales in California are up 83% from last year
  • Housing affordability, due to mortgage rates, income growth, and lower housing prices, has move up sharply and is not far from its early ‘70s high.

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide22

What does it take to get a loan in the current environment?

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide23

It's Best To . . .

Be Prepared

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide24

Commercial Underwriting Guidelines

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide25

Commercial Underwriting Guidelines

Ratios, Ratios And Even More Ratios

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide26

Commercial Underwriting Guidelines

Debt Service Coverage Ratio

Minimum 1.25

Preferred 1.50 +

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide27

Debt Service Coverage

STRESS TEST

INTEREST RATE +6%

OCCUPANCY  25%

RENTAL INCOME – 25%

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide28

Commercial Underwriting Guidelines

Loan to Value

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide29

Loan to Value (LTV)

MINIMUM 75%

PREFERRED 70%

OWNER FINANCED SECOND

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide30

Commercial Underwriting Guidelines

Credit Worthiness

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide31

Credit Worthiness

Personal credit of principals will be evaluated

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide32

Commercial Underwriting Guidelines

Property Analysis

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide33

Key components of the analysis:

  • Quality, condition and age of the property
  • Locationand accessibility of the property
  • Termsand length of the leases
  • Quality oftenants
  • Operatinghistory– income and expenses
  • Occupancy/vacancy ratios
  • Fair Market Valueand Fair Market Rent, as determined by the appraisal, will be analyzed and compared to the property operating history.

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide35

MAKE IT HAPPEN

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide36

“The next few months are among the most important in U.S. history. Because of the financial crisis, Barack Obama has the bi-partisan support to spend $1 trillion in stimulus. But we must make certain that every bailout dollar, which we’re borrowing from our kids’ future, is spent wisely. . . . . If we allow this money to be spent on pork, it will be the end of us.”

- Thomas L. Friedman, New York Times, December 24, 2008

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide37

Questions

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide38

We’re here to help.

Your Bank

– Your Partner

OneWorld Bank

The views expressed are those of Steve Holt and should not be attributed to One World Bank.

slide39

Karam AliPresidentCompass Investment GroupMicroVentureISAHouston Jubilee Investor’s GroupHouston, Texas

INVESTING IN ALLIANCES