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John S. Filli, SIOR, Appointed Chair of SIOR’S Benefits and Services Committee

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JOHN S. FILLI, SIOR, APPOINTED CHAIR OF SIOR’S BENEFITS AND SERVICES COMMITTEE

PHOENIX – NAI Horizon

John S. Filli, SIOR, Senior Vice President of NAI Horizon was appointed chair of the Benefits and Services Committee at the recent Fall Professional Conference of the Society of Industrial and Office Realtors® (SIOR), held in Toronto, Canada. In this position, Filli will oversee the committee’s management objectives and direct the activities of the committee to achieve its objectives.

SIOR has set forth the following definitions and mission statements for the Benefits and Services Committee:

SIOR Mission: The Society of Industrial and Office Realtors® maintains and promotes a professional designation of the highest quality for the benefit of its members and their clients.

SIOR Vision: The professional SIOR designation stands unchallenged for excellence in performance and is universally recognized as the prerequisite in the selection of a commercial real estate service provider.

Committee Function: Identify and/or provide advice and expertise about products and services that may qualify as benefits of membership (i.e. Professional Report Magazine, the SIOR Membership Directory, SIOR web site, etc.); report findings; make recommendations to the Board of Directors; and assist staff in the promotion or production of selected products or services intended as benefits of membership.

Filli achieved his industrial designation in SIOR in October of 2000 and has since served SIOR both nationally and locally in various leadership positions including: Vice Chairman- SIOR Professional Report Magazine Editorial Advisory Board (2007-2009); Membership and Retention Committee Chairman- Southwest Chapter SIOR (2002 & 2003); Secretary/Treasurer-SWC SIOR (2004 & 2005); Vice President SWC SIOR (2006 & 2007); and Chairman- NAI Global Industrial Council (2004 & 2005). Filli is also active in NAIOP, CCIM, SEVRAR and Valley Partnership.
As Senior Vice President of NAI Horizon, Filli’s primary responsibilities include the sale and lease of industrial properties and the acquisition and disposition of income properties.

Among some of Filli’s more notable achievements are the following:

• 1999- Recipient of the Mesa Broker of the Year Award
• 1999- Nominated for NAIOP’s Industrial Broker of the Year Award
• 2004- Recipient of NAI Global’s Industrial Council Service Award
• 2005- Recipient of NAI Global’s Industrial Council Leadership Appreciation Award
• 2007- Recipient of SIOR’s Largest Dollar Volume Transaction Award for the $20,000,000 disposition of 22.34 acres of land (The year long transaction involved the demolition of an 182,000 SF Manufacturing building, the relocation of a large electrical sub station, the removal and replacement of approximately 365,000 cubic yards of contaminated soil, and a lot split)
• 2008-Achieved NAI Global Gold Elite Status (Only a few of NAI Global’s 5,000 real estate agents qualified for this recognition in 2008)

The SOCIETY OF INDUSTRIAL AND OFFICE REALTORS®, based in Washington, D.C., is an international association of commercial real estate professionals who have been certified with the SIOR designation. SIOR designees are the most knowledgeable, experienced and ethical commercial real estate brokers. Individuals who hold the SIOR designation, working throughout the United States, Canada, Mexico, and overseas, are top producers representing more than 1,400 offices in 590 cities globally. To learn more about SIOR, go to www.sior.com.

 

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NAI Horizon is a full service commercial real estate brokerage firm serving the Greater Phoenix market and is a member of the NAI Global managed network. NAI Global is an international commercial real estate network with more than 325 offices in 55 countries. Build on the power of our network.TM To learn more about NAI Horizon or NAI Global, visit www.naihorizon.com or www.naiglobal.com.

Facing an Uncomfortable Refinancing Reality

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The availability of money remains in the open market; the difficulty, though, that owners/borrowers are having is dealing with the severely declining values making refinancing impossible. A condition which cannot be corrected by anything other than a commercial real estate market that appreciates in value — something that will probably not happen for several more years, at the earliest.

Most property owners acquired properties at aggressive cap rates as real estate values increased from 1999 thru 2007. Loans were readily available at 75% to 80% of acquisition price, frequently with an interest-only feature. For instance, $1 million of net operating income valued at a 6% cap rate resulted in a value of $16.7 million and a loan amount (75%) of $12.53 million. Today, net operating is income is most likely 85% of what it was several years ago, $850,000, and current cap rates are 9%, resulting in a current value of $9.44 million. Lenders have become more conservative lending at 60% loan to value ratios, or $5.67 million.

In order to refinance the outstanding loan of $12.53 million, the property owner will need to invest $6.86 million ($12.53 million less $5.67 million) to be able to secure a new loan for this property. Since the property value is currently less than the outstanding loan amount ($9.44 million current value vs. $12.53 million outstanding loan amount), it doesn’t make good business sense for the property owner to invest this additional capital into the property.

The result will be for the lender to take over the property and sell it at current market values, being forced to absorb a significant loss of at least $3 million, assuming no further deterioration in property value. The only thing left for the property owner is a huge tax obligation for his debt forgiveness.

Until the CRE industry accepts the fact that current values are significantly less than past years values, they will continue to blame the lending community for lack of funds. There are loans available from most banks, insurance companies and private funds in today’s environment, but at prudent underwriting standards — which most property owners refuse to accept.

 

Article By: Jeff Chambers, Director, Westcap Corp., Irvine, CA
Source: Watch List Voice: Facing an Uncomfortable Refinancing Reality