Neil Victor

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Sperry Van Ness International has specialist in all disciplines of commercial real estate brokerage. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery mini-storage team and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Neil Victor, CCIM is Senior Advisor with Sperry Van Ness Huntsville Office. Being part of the SVN organization allows us to access tool such as Site to Do Business and help our clients make sound real estate decisions.

Clearing the Way for Teamwork
N. Dean Meyer*

“The four most common obstacles to teamwork—the real reasons why teamwork doesn’t happen—are the following:

Real Reason 1: Incentives
Incentives may be designed to block teamwork. Many organizations still use a job-grading system that decides people’s titles and salaries based on the size of the group they manage, i.e., their headcount and budget. People are paid to build empires!…

Real Reason 2: Culture
Culture is ‘the way we work around here’—the practices common throughout an organization. And many organizations have bad habits ingrained in their cultures that undermine teamwork… Contrary to popular opinion, culture is one of the easier dimensions of an organization to fix. The key is to focus on practices, not values.

Real Reason 3: Structure
Structure is another common root cause. People think the only way to get staff to work together is to put them under a common boss. Thus, it’s common to find support groups reporting to one of their internal ‘customers’ and unavailable to the rest of the IT team…The key to overcoming this obstacle is internal customer-supplier relationships…

Real Reason 4: Resources
The fourth obstacle to teamwork is the most common and the most powerful: resources. Often, managers are willing to help one another, but their staff’s time and budgets are fully committed to their own priorities. This occurs when managers have their own budgets, and are expected to satisfy their customers’ demands as best they can with the resources they’ve been given. Each manager sets his or her own priorities for resources, and one manager’s highest priority may very well be another’s lowest priority. That, alone, is enough to kill teamwork.”

From: Team-Building and Teamwork
By N. Dean Meyer, CIO, April 30, 2006

Sperry Van Ness International has specialist in all disciplines of commercial real estate brokerage. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery mini-storage team and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Neil Victor, CCIM is Senior Advisor with Sperry Van Ness Huntsville Office. Being part of the SVN organization allows us to access tool such as Site to Do Business and help our clients make sound real estate decisions.

Today, as part of their regulatory overhaul strategy, the Obama administration unveiled a plan to require that stock brokers practice their trade under a higher fiduciary standard. The goal is to create a mechanism which ensures that brokers focus on their client’s interests vs. their own, or their fees. The move calls for certain “suitability” standards that a broker must take into consideration before recommending that an elderly person buy into a risky IPO, as an example. This proposal makes sense, is long overdue, and if put into practice represents a major victory for broker’s clients. In short, the government is saying “Focus on delivering positive results to your clients and not on earning a higher fee,” or again “Put the client’s interests first.” Sound familiar?

What amazes me about this sudden but important government intervention (and in our business - the emerging trend of commercial real estate brokers beginning to share fees) is that it took a near catastrophic event for people to start doing the right things for their clients. It took a 5,500 point net loss in the Dow, and a historic correction in the commercial real estate markets before stock and real estate brokers start to put their client’s interests first.

What’s even more amazing is that this good behavior is not being practiced because Advisors have realized that acting in a fiduciary manner is the right thing to do for the client. There was no epiphany there. Rather, stock brokers are doing this because it is being legislated, most commercial real estate brokers are practicing some semblance of cooperation because they know that the only way to a pay day is to utilize the brokerage community.

Exceptions to the above exist everywhere. Stock brokers are not bad people. My father was one. I am not indicting the entire brokerage community. Most real estate brokers are good human beings. The point is that the industry remains dysfunctional, and the Sperry Van Ness point of differentiation remains in full force and effect. No national firm can claim to have built their business around a policy of always putting the clients interests first by way of cooperating and sharing fees. No national firm has invested millions in technology and programs which increase the chances of the firm having to pay ½ of the fee to a competitor. No one is doing what Sperry Van Ness is doing, and the competition can’t just start cooperating and get results. There is so much more to putting the client’s interests first.

As an aside, our competitors our not necessarily “cooperating,” and giving away half the fee – read the fine print next time you see this advertised.

Kevin Maggiacomo | President

Sperry Van Ness | Corporate

18881 Von Karman Ave | Irvine, CA 92612

Cell 949.231.7757 | Fax 949-271-4614

maggiack@svn.com | www.svn.com

Sperry Van Ness International has specialist in all disciplines of commercial real estate. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Neil Victor, CCIM is Senior Advisor with Sperry Van Ness Huntsville Office. Being part of the SVN organization allows us to help our clients make sound real estate decisions.

The following is an except from the Sperry Van Ness Newsletter. If you would like a copy of the complete newsletter which includes all product types, please contact me. neil.victor@svn.com

Welcome to the 4th issue (Volume 1, Issue 4) of the Sperry Van Ness | Better Capital Partners-Capital Market and Interest Rate Update Newsletter. For those readers that missed our first few issues, each week or so we will provide our readers with an overview of the following: National commercial real estate interest rates and underwriting for the major property types, marketplace conditions and how they affect various property
types nationwide, insightful capital market analysis with a personal viewpoint and focused subject matter in every newsletter.

Multi-Family:
Written By: Jon Hosea, Principal SVN-BCP): The multi-family product type is still the favored property type for
agency and non-agency lenders nationwide. Overall purchase transactions remain thin, as most on this call already know. This is primarily due to the continued bid/ask gap so prevalent across the nation. We have found that the refinance business is relatively strong in this sector with hundreds of millions coming due in the third and fourth quarter of 2009. We also project that approximately $275 Billion will come due in 2010. Although agency lenders have an ingrained advantage to refinance loans that they currently service, this is only true in
situations such as refinancing FNMA loans with FNMA. This advantage evaporated in instances such as refinancing a FNMA loan with Freddie or HUD, and especially so with HUD where Fannie doesn’t offer the amount of leverage HUD can provide. Looking at the Fannie and Freddie programs, adjustable financing programs are priced around 4.60% to 4.80% with the interest rate capped at approximately 300 basis points above
the start rate. Acquisition LTV’s are still as high as 80%, but drop to 75% on cash out refi’s and underwriting debt service coverage ratios are as low as a 1.05 against the caped rate. Fannie and Freddie fixed rate loans with 5, 7 and 10 year terms are currently pricing at 5.70%, 6.20%, and 6.30% respectively. LTV’s are similar to the adjustable rate programs previously mentioned. Debt service coverage ratios are starting at 1.25 for both small loan and large loan programs on underwritten net income. Regarding HUD, it is currently the shining
star from both a loan sizing and interest rate perspective. HUD’s 35 year loan programs have recently been
pricing as low as 5.40%. Even if you include the 45 basis points for the MIP, the all in cost of debt is 5.85%, or 45 basis points below the Fannie or Freddie 30 due in 10 loans, just mentioned. Their old school prepayment penalty of 5,4,3,2,1 after lock out makes this loan program even more attractive when compared to Fannie and Freddie’s Yield Maintenance prepayment standard. Please remember that the HUD loan sizing is based on a 1.18:1 DSCR with a 35 year amortization with cash out LTV’s at 80%, or 85% with no cash out. All this said, we have definitely entered an environment where the more common loan sizing constraint is Loan to Value. Let me also add that most lenders, agencies and banks, are still looking for borrowers with previous multi-family
experience, who currently own one or more properties or at least have two years of historical ownership experience. Moving on to HUD’s LEAN program, the L-E-A-N process is still proving to make HUD the absolute go to financing for Health Care which included Assisted Care, Nursing Homes, and even Hospitals.
Please be aware that SVN-BCP has secured exceptional Correspondent lending relationships. These include
Fannie, Freddie, and especially HUD loan executions. These relationships allow us to offer identical loan terms as those that could be obtained by going direct to competing agency lenders. In essence, we stand on an absolute level playing field. SVN-BCP also has the ability to build 3rd party costs and fees into the interest rate spread thereby offering a borrower a lower out of pocket loan.

Sperry Van Ness International has specialist in all disciplines of commercial real estate. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Neil Victor, CCIM is Senior Advisor with Sperry Van Ness Huntsville Office. Being part of the SVN organization allows us to help our clients make sound real estate decisions.

Sperry Van Ness International has specialist in all disciplines of commercial real estate. Members of the Sperry Van Ness Multi Family Team, Auction Team, Sale-Lease back, Asset Recovery and other teams are comprised of Commercial Real Estate brokers of the highest caliber. Neil Victor, CCIM is Senior Advisor with Sperry Van Ness Huntsville Office. Being part of the SVN organization allows us to help our clients make sound real estate decisions.