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Winter 2011: SBA Loans Can Save Us Really!

Winter 2011: SBA Loans Can Save Us Really!

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Published by: narwebteam on Jan 13, 2012
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01/27/2014

 
ith credit sources hard to access
, it seems that more busi-nesses would turn to the Small Business Administration (SBA)and its loan programs for building acquisitions. In spite of today’ssub five-percent,20-year,fixed loan rates however,the program battles somemisperceptions and does little to promote its loans.In a typical SBA 504-loan,a bank provides the first mortgage at 50 percentloan-to-value. A certified development company (CDC) – arranged throughthe SBA – provides the second mortgage of 40 percent and the borrowerputs down 10 percent. This program facilitates billions of dollars in com-mercial real estate transactions annually.Christopher L.Crawford,president and chief executive officerof the NationalAssociationof DevelopmentCompanies(NADCO),one of the industry’s primarytrade associations, admits the SBA processing and the CDC industry overallhave had their issues. “There were once 70 autonomous SBA field offices;butwe advocated for – and have achieved – central processing and criteria con-sistencyto process and accept orreject loan applications,said Crawford. Loanauthorization approval is now down to two to three days.There remain some document requirements and restrictions on SBA lendersthat banks don’t necessarily face,but Crawford suggests that the hurdles areworth the benefit. The SBA requires more money down if the business is lessthan two years old or the real estate is a special use. “They require finger-printing and there are more restrictions on to whom they can loan money,”Crawford said. “But, you can’t find a bank that will loan at a 20-year fixedrate on commercial real estate with only 10 percent down,” he added.
Brokers’ Experiences
Jack Faris, SIOR, senior vice president with Voit RealEstate, has worked with buyers to complete as many as100 SBA loans over the last 10 years. “The SBA loanprocess just isn’t as tedious anymore,” he said. He citeda 45-60 day “start-to-finish” timeline as typical – “justlike a conventional bank loan program.”Recently Faris worked with Fireblast 451, Inc., a manufac-turer of mobile firefighter training systems. His client acquired a building,and the company significantly expanded and upgraded its facility, makingthem much more efficient. “The deal wouldn’t have happened without theSBA-504 loan program;the company just didn’t have the money to put down25 percent of the purchase and renovation costs,” Faris said.Michael and Mark Nelson, brothers in industrial firm, Nelson Hill in theChicago market,pull no punches about the effectiveness of SBA loans. “Fromour point of view, it saved our lives,” Michael said. “People wouldn’t have
WWW.REALTOR.ORG/COMMERCIAL
CommercialConnections
G
Mark-to-Market Accounting ProposalPoses Threat to Commercial MortgageMarket Liquidity
CAPITOL REPORT6
PLEASE TURN TO PAGE5
“The Voice for Real Estate” 
T
HE
N
ATIONAL
A
SSOCIATION
O
F
REALTORS
®
IN THIS ISSUE
COMMERCIAL REAL ESTATE NEWSLETTER VOLUME 12 ISSUE 1WINTER 2011
SBA ProgramsCan SaveTransactions...
Really!
W
I
Visit
NADCO.com/org
and
www.sba.gov 
for a list of CDCs andprogram information
I
Meet with a local CDC to understand their mechanics and processfor SBA-504 loans
I
Most SBA offices conduct webinars on loan basics; contact yourdistrict office for details
I
Work through your local REALTOR
®
association to arrange aneducational program conducted by the SBA or a CDC.
Knowledge Resources for SBA Programs
Jack Faris,SIOR,VoitReal Estate
 
2WWW.REALTOR.ORG/COMMERCIALWINTER 2011
CommercialConnections
NAR PRESIDENT
Ronald Phipps,
GRI, CRS,ABR, GREEN
Warwick, RI 
NAR COMMERCIAL LIAISON
Pamela Monroe, CPM
Pleasantville, NJ 
COMMERCIAL COMMITTEE CHAIR
Dan Sight, CCIM
Leawood, KS 
SENIORVICE PRESIDENT
Bob Goldberg
Marketing, Business Development,Commercial Services & Business Specialties 
COMMERCIAL DIVISION
VICE PRESIDENT
Jan Hope
COORDINATOR
KaelaAltman
MANAGING EDITOR
Barbara Hamlin
MANAGING DIRECTOR
Cheré LaRose Senne
DEVELOPMENT MANAGER
Emily Line
MARKETING MANAGER
Jean Maday
ASSISTANT
Tracy Porterfield
Reach any of us at:
NARCommercial
@
realtors.org
430 N. Michigan AvenueChicago, Illinois 60611-4087800.874.6500
The
Latest
Welcome Bill Armstrong, GRI –NAR’s 2011 Treasurer
How fortunate we are
to haveBillArmstrong as NAR’s new treas-urer. For the second consecutiveterm, a national officer is a commer-cial broker. A REALTOR
®
for morethan 27 years, Bill is vice presidentof Mackintosh REALTORS
®
inFrederick, Maryland. “It’s quite sat-isfying to know Mr.Armstrong willcontinue the strong advocacy for commercial practi-tioners NAR has worked so hard on in recent years,” saidJan Hope, vice president, NAR Commercial Division. Billrecently took over the monthly commercial podcast forNAR, so take a moment to hear the latest in legislativeachievements and commercial news.
Visit:
http://tinyurl.com/Armstrong-New-Year 
NARCommercialCommitteesLeadersfor2011AnnouncedThank you for your service!
The following members
will serve in leadership rolesto advance NAR Commercial goals and objectives.Commercial Committee Chair: Dan Sight,(KS);Vice-Chair:Randy Scheidt,(IN);Property Management Chair:JaredMartin,(CA);Vice Chair:Wendell Davis,(FL). LeadershipForum Chair:MichaelTharp (OR);Vice Chair Kristin Lamb(GA).Legislation Regulatory Subcommittee Chair RobertGoldstein (FL);Vice Chair:Max Gurvitch (NY).ResearchSubcommittee Chair:GeorgeWonica (NY);Vice Chair:Steven Moreira,(FL). Economic Issues & Commercial RealEstate BusinessTrends Forum Chair:Linda St.Peter,(CT);Vice Chair:Don Faught,(CA). Fifty additional membersand affiliates will serve as Committee Members.
Landing the Deal
atREALTORS
®
Land Institute’s2011 National Conference –March 24 – 25
As farmland prices
reach historic highs, environ-mental and property rights issues hit the headlines, andland markets adjust to the realities of today's market,it’s more important than ever that practitioners whospecialize in land transactions keep their edge.Sharpen your edge with RLI in Nashville!
Registration and program information:
www.rliland.com/NationalLandConference.aspx

Signature SeriesSpeakers Bureau
Signature Series
speakers are experts in various com-mercial real estate areas. Review their areas of expertiseand start a discussion within yourAssociation to develop aprogram and gain additional knowledge. Adding value toyour client transactions is especially important in today’smarket. Whether you’re looking for a tenant rep,a socialmedia expert,a marketing specialist or an expert in almostany area of commercial real estate,Signature SeriesSpeakers can design a session to meet the specific needsof yourAssociation.
Review the credentials of this year’s speakers:
www.realtor.org/commercial/rca_signature_series

tinyurl.com/REALTORCommercial
www.facebook.com/Realtors.Commercial
www.Twitter.com/commsource
PLEASE TURN TO PAGE8
We’re all getting more news
through our com-puters, phones and tablets these days, and now that’strue for NAR Commercial news too.This print edition isshorter because we’re providing more information onthe
CommercialSource.com
blog and on the site’s e-newsletter,“The Source.” We’ll post news regularly at
REALTOR.org/commercial 
too. Let us know what youthink; offer your feedback – it’s easier than ever; justcomment on the blog.
Visit:
http://blog.commercialsource.com/

We couldn’t have done itwithout you…
Hats off to Commercial NARdiGras sponsorsand cohosts.
These partners helped make pos-sible programs and events at NAR’s annual confer-ence this past fall. On behalf of NAR Commercialmembers,
thank you
to: GlobeSt.com/Real EstateForum, Kodak, Louisiana REALTORS
®
,TheCommercial Investment Division – New OrleansMetro Association of REALTORS
®
, REALTOR
®
Association of Acadiana, NAR’sYoung ProfessionalsNetwork, REALTORS
®
Federal Credit Union, andNAR Affiliates: CCIM, SIOR,RLI, IREM.
CC
William J.Armstrong III,GRI, 2011 NARTreasurer 
NEW!
Important Changein NARCommercial Communications!
 
3
The NAR Commercial Member Profile documents that practitioners with professional designations earn more, so we thought itwould be a good time to publish this summary of NAR Affiliate designation requirements.
CC
Affiliate
News
CCIM Institute LaunchesHybrid Courses
Adding convenience
and flexibility to a stu-dent’s progress through its core curriculum,the CCIM Institute is offering a new hybridcourse structure beginning in February 2011for its four core courses: CI 101 FinancialAnalysis for Commercial Investment RealEstate, CI 102 Market Analysis, CI 103 UserDecision Analysis, and CI 104 InvestmentAnalysis. The hybrid format consists of fourinstructor-led, online sessions over two weeks,then 2-½ days of classroom instructionallowing for hands-on application exercisesfeaturing real world case studies. All onlinesessions are recorded so students can reviewthe material to better prepare for the class-room sessions. This new delivery format givesstudents access to the same quality content,resources, and instructors available in the tra-ditional five-day classroom settings.
For more details, visit:
www.ccim.com
SIOR ContinuesMembership Growth
The Society of Industrial & OfficeREALTORS
®
now boasts 3,000 membersworldwide. They are in 580 markets in 28countries – 55 percent are with large firmsor networks and 45 percent either own orwork for independent firms. SIOR is devel-oping in other ways too; its
Professional Report 
quarterly magazine is now availableonline and on any mobile device. There isalso an iPhone and iPad app, and SIOR is inthe process of updating its Web site forbetter networking, collaboration and infor-mation sharing. The “Locate an Expert” fea-ture will be greatly improved with newcapabilities to search for SIORs anywhereand anytime, on both mobile devices anddigital platforms.
CC
Visit SIOR at:
www.sior.com/

Designation Description Requirements Cost
For more infoWeb site/Phone
The
CCIM Institute
confers the CertifiedCommercial Investment Member (CCIM)designation to commercial real estate andallied professionals. The core educationcurriculum addresses financial analysis,market analysis, user decision analysis,investment analysis, and negotiation.
CCIM
I
200 classroom hours
I
Recommended Prerequisites
I
Ethics Requirement
I
Two elective credits
I
Portfolio of Industry Experience
I
Pass a Comprehensive ExamMembership: $595/yearTuition: fees vary
www.ccim.com
or 800.621.7027The
CounselorsofRealEstate
®
is an inter-national network of commercial practitionerswho provide advice to clients on complex realproperty situations and land-related issues.
CRE
®
Membership is extended byinvitation only on a sponsored orself-initiated basis.By invitation only;$1,500 annual dues
www.cre.org
312.329.8427The
Instituteof Real EstateManagement
is a community of real estate managers of allproperty types dedicated to ethical businesspractices and maximizing the value ofinvestment real estate.Four specific designations are conferred.
I
CPM - Certified Property Manager
®
I
ARM -Accredited Residential Mgr
®
I
ACoM -Accredited Commercial Mgr
®
I
AMO
®
-Accredited Mgmt Organization
®
Requirements vary; all include education,experience, examination, and pledging toIREM’s
®
Code of Professional Ethics.Membership dependsonmembership typeRange: $195 - $545; pluschapter dues.
www.irem.org
800. 837.0706,Ext. 4650The
REALTORS
®
LandInstitute
, theprofessional membership organization forreal estate practitioners specializing in variousland transactions – transitional land, farms,ranches, timberland, and recreational andspecial use properties.
Accredited Land Consultant
®
ALC
I
Hold candidacy membership for at least 6months
I
Successfully complete 6 LandU courses(120 instruction hrs); 3 required/3 electives
I
Specialized land experience (3 yrs)
I
$10 million minimum transaction portfolio
I
Successfully complete comprehensive examMembership: $395Course fees vary;$350ALC application fee
www.rliland.com
800.441.5263The
SocietyofIndustrialandOfficeREALTORS
®
(SIOR) is the leadingprofessional commercial and industrialreal estate association.
I
Combination of experience, transactions,education, and ethical standards
I
Strong transactional history in brokerage fee-based services,or executive management
I
Six specialist categories:Advisory Services Specialist• Executive Specialist• Industrial Specialist• Industrial & Office Dual Specialist• Office Specialist• Sales Management SpecialistMembership:$1,150(Active Designees);$300-$1,500(Assoc. Mbrs)Courses fees:Range: $900 - $1,500ComprehensiveMembership Exam in lieuof coursework – $2,000
www.sior.com
202.449.8200
WWW.COMMERCIALSOURCE.COMWINTER 2011

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