ATLANTA --Areas that did not get as much focus some years back in commercial real estate are now under the spotlight.
Jeff Miller, president of Miller Real Estate Advisors, an Atlanta-based appraisal company, has seen some noted shifts in how CRE is appraised given the economic environment. Miller was one of the guest speakers at Member Business Solutions LLC's Credit Union Small Business Summit today.
"When people were forecasting growth and rents, what may have made sense back then, doesn't make sense when things take a turn [for the worst]," Miller said.
One of the biggest challenges Miller has noticed is with those leased properties that do not have an anchor tenant. He described them as pioneer properties, meaning they are built on the verge of growth that never actually materializes. In the end, a bunch of distressed properties end up sitting idle. Apartment fraud is also on the increase with a rise in fake rent rolls, Miller noticed. Still, some sub markets are strong and credit unions should be able to find them if they keep communication lines open with those in the real estate industry, he offered.
Barbara Morrison, an underwriter with MBS, backed some of Miller's observations saying credit unions need to also remember that even in a touch economy, at some point the dark clouds will clear.
Try to guess which ones will walk away [from a loan] first. You can expect those will be the ones to come back to you the quickest for help" during a revitalized economy, Morrison said.
