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Follow on Google News | U.S. Economy Looks Bright, but Commercial RE Industry’s Appetite for Risk Could Prove ProbleNoted Economist Sam Chandan, CNBC Commentator Steve Cortes Headline Annual Trigild Lender Conference in San Diego
By: Trigild Event headliners Steve Cortes, an author and CNBC commentator and Sam Chandan, Ph.D., founder and chief economist of Chandan Economics, focused on the U.S. economy and the state of the commercial real estate industry – with respected industry experts also exploring current trends and hot button issues in the real estate and lending markets. The annual San Diego event drew a full slate of panelists and speakers – among them top executives in the special servicing/banking, nonperforming loan buying, lending, investing and legal industries – with 20 educational sessions and a series of networking breaks. With a special focus on non-performing loans, the conference featured topics such as: Commercial Property Pricing and Loan Sale Trends, Capital Raising, Equity Sources, Receivership/ American’s Future is Bright Overall, the message was upbeat, with Cortes noting that “contrary to conventional wisdom, America’s future is bright.” The U.S., he said, will “remain exceptional, due to multiple factors, including a culture of innovation, demographic advantages, immigration, geography, the energy revolution and military dominance.” While it has been perceived that China presents a risk to the U.S. – that is not the case, said Cortes, who penned Against the Herd: 6 Contrarian Investment Strategies You Should Follow."China went from bikes to jets in a generation, so the world thinks it is usurping the U.S., but cracks are emerging, with central planning there failing – resulting in massive corruption and overbuilding.” Moreover, he said, American innovation is currently driving the world, “with 75% of global venture capital happening in the U.S.” Fueling the economy here, he said, is immigration and a high birth rate. “The U.S. will have plentiful young workers far into the future.” Appetite for Risk Characterizes CRE Climate Meanwhile, on the commercial real estate front, Chandan expressed major qualms. “While there is a sense of excitement – with more lending in more places to more borrowers – there is an increased willingness for lenders to take and transfer risk, which could prove problematic in the future. “We make our worst loans when we are most confident and our best loans when most conservative,” Additionally he said, there is still uncertainty about interest rates. “What share of mortgages being made today can withstand a rise in interest rates? We’ve become endured to the idea of interest rates remaining at historic lows.” The bottom line? “A degree of myopia exists in the market,” he said. Due to the nature of the business cycle, “the loans being made today will expire under distress.” The fact that “foreign investors are buying and domestic investors are selling here should be an indicator that problems are arising in pricing. We are entering in dangerous territory in next few years.” About Trigild Headquartered in San Diego with offices throughout the country, Trigild has nearly 40 years of property management and fiduciary expertise, with a focus on managing and maximizing value for assets in an array of industries, including commercial real estate, multifamily, hospitality and more. Since its inception, Trigild has developed a full service national operating platform providing institutional quality services to private real estate investors and financial institutions. For information, visit www.trigild.com. Media Contact: Sydnie Moore moore2com@gmail.com 619-823- End
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