By “The Parliaments” (George Clinton and Daron Taylor – 1967)
Some of you are old enough to remember this song. Some of you won’t admit that you are. It is a lead in to my blog entry this week for good reason. Not once, but twice in the past two weeks I had the opportunity to represent our association at Congressional hearings. Last week, I traveled to Washington, DC to speak about the floundering commercial real estate market. Joining me at the panelist table was Jon Greenlee from the Federal Reserve, Richard Parkus from Deutsche Bank, and Jeffery DeBoer, CEO of the Real Estate Roundtable.
We all brought a unique perspective to Congress, but, in the end, we were all were saying the same thing. $1.3 trillion of debt in the commercial real estate sector needs to be refinanced over the next several years and no one is doing a thing about it. Yes, the Troubled Assets Relief Program (TARP) was created to help, but the banks seemingly took the money, shored up their balance sheets and have refused, for the most part, to lend it out. Yes, Term-asset Loan Facitilites Facilities (TALF) should help but it only works if Commercial Mortgage Backed Securities (CMBSs) are being purchased. The first round of CMBS sales didn’t bring a single buyer to the table. Following that, Standard and Poors, the privately owned and often times revered rating company, reduced ratings of bonds from triple-A to double-A and even single-A. TALF money, under its current requirements can’t be used for anything that isn’t triple-A rated. I provided several examples of “real world” problems when trying to finance even simple transactions involving commercial real property. In the end, we all told Congress we are scared. If the “second shoe drops” (i.e. the commercial sector fails which is more likely to happen than not, as of today) it will make our recent wrestling match with the residential market woes look like kindergarten. Please tell your Representative and Senators we need their help and we need it now!!
Apparently, someone noticed that I enjoy this type of assignment – the exact quote was “Jim, you really know how to have a good time.” This precipitated President Charles McMillan and the NAR’s Government Affairs staff to ask me to come to Washington again this week for – you guessed it — more testifying! This time I shared the panelist table with the General Services Administration (They handle the government owned and leased real property management duties including leasing, maintenance, etc.), the Department of Energy and the Department of Transportation. This hearing was to discuss “green” benefits and all that it encompasses. Congresswoman Norton from the District of Columbia chairs this Subcommittee and our DC building is smack dab in the middle of her geographic area of representation. I first met her in 2004 when we dedicated our new headquarters building. She truly appreciates our efforts.
In the end, it was obvious that NAR is well respected for our green building and Green designation efforts.
We have put our money where our mouth is with our own real property. We were also able to give IREM a boost by letting Congress know we didn’t understand why the GSA didn’t use the preeminent property management institute for consulting and real property management – especially when the private sector seems to be so capable and efficient!!
I wouldn’t be honest if I didn’t say that I really do enjoy testifying. The chance to get our message out on behalf of the entire membership makes me feel so good. Our Association is well respected on Capitol Hill. We will continue to get the word out. There is no reason to be shy about telling our story. Not only is it a wonderful story to tell but it’s the truth! That’s why it helps every single person that lives or works in the United States. Have a great summer! — Jim Helsel, 2009 NAR Treasurer