Commercial Real Estate and Hotel Industry: What is the Smart Money Saying and Doing? January 26, 2009

Commercial Real Estate and Commercial Real Estate and Hotel Industry: Hotel Industry:

What is the Smart Money Saying What is the Smart Money Saying and Doing?and Doing?

January 26, 2009January 26, 2009

Commercial Real Estate Commercial Real Estate and Hotel Industry: What is and Hotel Industry: What is

the Smart Money Saying the Smart Money Saying and Doing?and Doing?

ModeratorModerator Bidjaan KassamBidjaan Kassam – CBRE Hotels Dallas, VP – CBRE Hotels Dallas, VP

PanelistsPanelists Perry MolubhaiPerry Molubhai – Atlantic Hotel Group, – Atlantic Hotel Group,

Managing DirectorManaging Director David CopelandDavid Copeland – CBRE Retail Services – CBRE Retail Services

Dallas, VPDallas, VP Steve HoltSteve Holt – One World Bank, CEO – One World Bank, CEO Karam AliKaram Ali – Alliance Originator – Alliance Originator

Commercial Real Estate Commercial Real Estate and Hotel Industry: What is and Hotel Industry: What is

the Smart Money Saying the Smart Money Saying and Doing?and Doing?

Hotel Market 2009 ForecastHotel Market 2009 Forecast Hotel Owner PerspectiveHotel Owner Perspective Retail Market OverviewRetail Market Overview Lending in 2009Lending in 2009 Investing in AlliancesInvesting in Alliances Question and AnswerQuestion and Answer

Bidjaan KassamBidjaan KassamVice PresidentVice President

CB Richard Ellis HotelsCB Richard Ellis HotelsDallas, TexasDallas, Texas

HOTEL MARKET 2009 HOTEL MARKET 2009 FORECASTFORECAST

Perry MolubhaiPerry MolubhaiManaging DirectorManaging Director

Atlantic Hotel GroupAtlantic Hotel Group

HOTEL OWNER HOTEL OWNER PERSPECTIVEPERSPECTIVE

David CopelandDavid CopelandVice PresidentVice President

CB Richard Ellis Retail ServicesCB Richard Ellis Retail ServicesDallas, TexasDallas, Texas

RETAIL MARKET OVERVIEWRETAIL MARKET OVERVIEW

Retail BankruptciesRetail Bankruptcies

New GrocersNew Grocers

13

ISMAILI BUSINESS CONFERENCE

REGIONAL

Steve Holt, President and C.E.O.

14The views expressed are those of Steve Holt and should not be attributed to One World Bank.

15The views expressed are those of Steve Holt and should not be attributed to One World Bank.

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.

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


What’s the Good News?What’s the Good News?


Panera Is One Restaurant Looking For Positive Things In 2009January 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


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.


Fox Reports Credit Markets Beginning to Thaw

January 15, 2009


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.


What does it take to get a loan in the

current environment?


It's Best To . . .

Be Prepared


Commercial Underwriting Guidelines


Ratios, Ratios And Even More Ratios



Debt Service Coverage Ratio


Minimum 1.25

Preferred 1.50 +


Debt Service Coverage

STRESS TESTINTEREST RATE +6%

RENTAL INCOME – 25%

OCCUPANCY 25%


Loan to Value



Loan to Value (LTV)

MINIMUM 75%

PREFERRED 70%

OWNER FINANCED SECOND


Credit Worthiness



Personal credit of principals will be evaluated

Credit WorthinessCredit Worthiness


Property Analysis



Key components of the analysis:

• Quality, condition and age of the property

• Location and accessibility of the property

• Terms and length of the leases

• Quality of tenants

• Operating history – income and expenses

• Occupancy/vacancy ratios

•Fair Market Value and Fair Market Rent, as determined by the appraisal, will be analyzed and compared to the property operating history.



MAKE IT HAPPENMAKE IT HAPPEN


“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


QuestionsQuestions


We’re here to help.

Your Bank – Your

Partner

We’re here to help.

Your Bank – Your

PartnerOne World BankOne World Bank

Karam AliKaram AliPresidentPresident

Compass Investment GroupCompass Investment GroupMicroVentureMicroVenture

ISAISAHouston Jubilee Investor’s Houston Jubilee Investor’s

GroupGroupHouston, TexasHouston, Texas

INVESTINGINVESTING IN ALLIANCES IN ALLIANCES

Documents

Commercial Real Estate and Hotel Industry: What is the Smart Money Saying and Doing? January 26, 2009