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Last year in Emerging Trends, we predicted that the real estate jobs picture would change dramatically. Acquisitions and investment bankers would be out, asset managers and workout specialists would be in. Clearly the transactions specialists have been hurting big time with generally gridlocked markets, thanks to little financing to grease dealmaking and expectations for lower pricing that sellers are not yet motivated to meet. Leasing and asset managers also have been kept busy trying to squeeze as much operating income out of properties in the face of potentially declining NOI (operating income) numbers. What's been more surprising has been the relative lack of workout activity -- in fact defaults and delinquencies have stayed very low.

This picture may be changing. Banks and other lenders have been bending over backwards to give borrowers some leeway, and keep any more nasty loan problems off their plates. But regulators are starting to crack down and bankers want to clear their balance sheets of problems as soon as possible so they can get back in business sometime next year. It's time to clear the decks, because the economic uncertainty gives little hope that borrowers will be rescued by increasing demand trends. Finally the lending community is stepping up hiring of workout specialists in a clear sign the tide on problem loans is turning. "It's not glamorous work, but you'll learn more about real estate doing workouts in 18 months than you have doing acquisitions for ten years," says a leading headhunter, who notes that everyone will continue to make less next year.

So watch as banks move to cut their losses. Expect more contention between lenders and borrowers to surface, and some rough headlines. But the good news is there is one growing sector in the real estate business. 

 

Comments

[Kusadasi Real Estate]

Thank you very much for this article. Take care.

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