LMC Group Announces Deal with the City of Wilmington

IT’S OFFICIAL !

Contracts were inked today between Patrick “PJ” Doherty of The LMC Group and the City of Wilmington for brokerage services for the city’s endeavors and real estate holdings.  The agreement makes Mr. Doherty and The LMC Group one of two exclusive Brokers for city property and acquisitions.  Should any City of Wilmington real estate matters arise with regards to property or acquiring property, real estate inquiries and property evaluations, Mr. Doherty with The LMC Group will be your contact.

“The city had very strict requirements for potential brokers” stated Mr. Doherty.  “I am extremely pleased that the city recognized my credentials along with the passion and focus The LMC Group has in the area, and I look forward to working with the city to promote city business and harmony with its citizens.”

One of the city’s requirements was that the candidate selected for this position must contain exclusive knowledge and understanding of discounted cash flow models.  Additional requirements were specific to commercial brokers, and applied experience in the field of commercial real estate and finance.  Mr. Doherty began in the real estate business in 1997 from the banking side, then moved into multi-family development, land sales, and earned CCIM designation in 2010 with concentration on office and industrial leasing.  Mr. Doherty joined The LMC Group in January 2011 because of its deep roots in the area and its passion for creating new jobs in the construction industry, that has been hit so hard by the recession.

The LMC Group is an out of the box finance and real estate group dedicated to serving the area’s stalled construction, development industries as well as office, industrial and multifamily real estate sectors.  At last count, this group has put in place over 500 transactions involving bank asset sales, retail sales, note purchases, investment deals, tenant leases, special assets sales, leasing & management, along with consulting on loan modifications for the government’s Making Home Affordable Assistance Program.

Congratulations to “PJ” Doherty and The LMC Group for earning this trusted relationship.  If you desire to sell property to the city, or desire to buy property from the city, or simply have questions, Mr. Doherty’s direct line is 910-297-9572 and his email address is PJDoherty@TheLMC.com

Loadmatch Logistics Utilizes The LMC Group for Relocation

Wilmington Commercial Real Estate News

The LMC Group announced today that Loadmatch Logstics, LLC  has signed a long term lease with Ashes Drive, LLC to occupy the building located across from Mayfaire Town Center off Sir Tyler Road and Military Cutoff, Wilmington, NC.

LoadMatch Logistics arranges the transportation of shipping containers from ocean ports in the Southeast for import clients and then utilizes those containers for export shipments when they are returned to the port instead of being returned empty. Without LoadMatch Logistics services, a truck driver would pick up a shipping container of imported freight at the Port of Wilmington and transport it to an N.C. distribution center. The truck would then return to the port with no container. The cost for the round trip transportation was paid for by the importer. With LoadMatch’s service, this empty truck would be matched with a container bound for the port. The service saves the importer money, increases revenue for truck drivers and reduces the number of empty trucks that are traveling on the state’s highways. LoadMatch Logistics has developed a proprietary web based system to match imported shipping containers with those bound for export. It automatically notifies clients of delivery and pickup appointments, pickup and delivery confirmations and generates paperless invoicing, all via email. “Many times per day there are empty containers passing each other on the highways and our goal is to eliminate that,” said Winstead. Fuel efficiency for the typical container tractor is about 5 miles per gallon. Every matched container results in one round trip eliminated, thus saving 80 gallons of diesel fuel and related emissions. LoadMatch Logistics does business with the largest exporters of containerized cargo out of the US as well as the largest shipper of forest products from the US, Winstead said. LoadMatch Logistics also manages containers in the Southeast for the largest global transportation company in the world, DHL Global Forwarding. “We have just begun to serve the Southeast. We think we can grow to 10,000 containers per month.”

The LMC Group completed it’s search for space for Loadmatch Logistics near the end of July with leases in place the first week of August.  ” We have great clients searching for good quality space, and we were pleased to be able to deliver the space needed by Loadmatch Logistics in a timely fashion” stated Roy Holdford, CEO of LMC.  “Our guys work really hard, and it is imperative that we pull out all the stops to satify the needs of the real estate client today.”

The LMC Group is growing rapidly on the scene in this up and down economy.  “We are determined to serve the needs of the community, and constantly remind ourselves that our focus is creating and keeping jobs by providing solutions to the challenges in today’s real estate market.  If we can facilitate or provide a solution for any problem or venture, you can count on The LMC Group getting the task at hand completed” stated Holdford.

The LMC Group is a Commercial Real Estate Firm with strong ties to Development, Commercial Investments, Resurgence and Recapitalization of Residential Communities, Funding and Special Asset Structuring.

Foreclosed Property Updates

 LMC Group Foreclosure Photo

As the federal government has doggedly worked through concerns about foreclosure documentation practices, federal financial agencies have aggressively resumed their sale of foreclosed properties.

Through the first half of the year, the FDIC has sold $1.073 billion in foreclosed properties. This compares to $974.7 million in the first half of last year and
$482.2 million in the first half of 2009. More importantly, the amount of commercial real estate being sold by the FDIC has jumped more than 12 times in that time frame. Just
$39.8 million of FDIC property sales in 2009 consisted of commercial and multifamily properties. This year, more than half of the sales ($540.3 million) have been commercial real estate. In addition, land sales have increased from $86.1 million in 2009 to $310.6 million this year. Also, as commercial sales have been increasing, the number of single-family residential sales being handled by the FDIC is falling from $307.7 million in 2009 to $219 million this year.

While there has been some anxiety in the marketplace over the potential impact that a surge of distressed CRE properties coming into the marketplace may do to sales values, CoStar Group senior real estate strategist Chris Macke says there is an upside to the trend.  “The increased disposition activity is good for the industry,” Macke said. “The sooner we clear troubled assets the sooner the market will return to normal.” However, Macke warned, “with funds available to deal with troubled assets depleted and no appetite from Congress to provide additional funds, regulatory agencies do have limits on how quickly they can clear out all the troubled transactions there are to deal with.”

The nation’s government-sponsored enterprises are also increasing their REO property sales. Through the first three months of the year, Fannie Mae sold 37 multifamily properties on which it had foreclosed compared to 13 in the same period last year. At the same time, the number of multifamily properties it has picked up has remained fairly consistent, 50 in the first quarter of this year and 47 a year ago.  Overall, Fannie Mae sold 62,814 properties in the first three months of this year vs. 38,095 in the same period a year earlier. Those sales have produced proceeds of $11 billion in the first quarter of this year compared to $7.7 billion the year-ago period.

Through the first three months of the year, Freddie Mac has sold 31,628 properties vs. 21,969 in the same period a year earlier. Freddie Mac did not break out its multifamily property dispositions separately but it was holding only 15 multifamily repossessed apartment properties on its books as of March 31.  According to the Dept. of Housing & Urban Development, the Federal Housing Administration (FHA) acquired 7,667 REO properties in June and sold a record 13,609 properties (breaking the record of 12,671 properties sold in May).

The FHA REO inventory has declined from 69,958 at the end of the first quarter to 54,645 at the end of June.

Bases Will Remain Constant for Our Area for Years to come – Great News!

Marine Corps general: Bases will remain economic rock on East Coast

via The Associated Press 

COLUMBIA — The Marine Corps may face tight budgets and manpower cuts, but its installations will continue to be centers of economic activity in surrounding communities, the outgoing commander of seven East Coast Marine Corps bases said Tuesday.

“We will continue to be an economic engine for this area, and the areas where we have a presence,” Maj. Gen. Carl Jensen said in a farewell interview Tuesday from his center of operations at Camp Lejeune, N.C.

Jensen, 57, is retiring as commander of Marine Corps Installations East after 35 years in uniform. He passes command of units in Virginia, North Carolina, South Carolina, Georgia and Florida to Col. Thomas Gorry on Friday.

 The Marine Corps may face tight budgets and manpower cuts, but its installations will continue to be centers of economic activity in surrounding communities, the outgoing commander of seven East Coast Marine Corps bases said Tuesday.

Asked about the potential for cuts to military budgets and personnel, Jensen said the Marine Corps has weathered economic stresses and military drawdowns in the past and will continue to do so in the future.

While the Marine Corps overall has grown by tens of thousands in recent years, the area around Camp Lejeune has also boomed with new military construction, Jensen said. He said his command in eastern North Carolina alone has been undergoing so much construction that expenditures have amounted to about $2 million daily.

However, the current fiscal year may well be the last such boom time for military construction budgets, the two-star general said.

Jensen said Marine Corps Commandant Gen. James Amos has said the Corps could cut its forces about 20,000 to about 186,000 men and women in uniform, depending upon conditions such as the conflict in Afghanistan, where a drawdown is set to begin.

“It’s not so dramatic that we would have to take extraordinary measures,” Jensen said, adding that cuts could be made through attrition and by bringing fewer recruits into the Corps.

Jensen said it is clear that in the nation’s current economic times, “we will have to find some innovative ways to keep the level of excellence we have here” as they manage budgets and personnel.

“We’ve been through this before,” he said of the economic expansion and contraction. “The Marine Corps will survive very well.”

Communities around military installations, he predicted, will be able to “count on that as a rock to lean upon.”

LMC Group Real Estate CommunityJensen, of Wilmette, Ill., has overseen Marine Corps installations in Quantico, Va., Camp Lejeune, Cherry Point, and New River, N.C., Beaufort, S.C, Albany, Ga., and Jacksonville, Fla., since July of 2008.

IN SUMMARY:  The military is driving economic boom surround its bases with house starts and business expansions.  While the new recruits may dwindle with the budget cuts, personnel and officers coming home will continue to drive the need for off-base housing.  The LMC Group has been fueling that economic stimulus since 2009 and refiring stalled subdivisions to be able to deliver affordable housing for our troops.  For more information, please contact us at www.lmcrealestate.com .

Bank of America Special Assets and The LMC Group

BOA Special Asset Sold in 30 days
BOA Special Asset Sold in 30 Days

The LMC Group announced today the collaboration with the Special Assets regional division of Bank of America in an effort to provide an outlet for some of its special assets  inventory.  BOA is in the process of identifying certain properties in their REO portfolio for liquidation and The LMC Group has a heavy presence in the area of revitalizing broken projects and asset portfolios.  LMC Group’s commercial consultants, Dennis Musser and PJ Doherty, after having numerous discussions with BOA’s special assets division, determined the feasibility of providing long and short-term solutions for the banks REO and pre REO departments.  “Bank of America unfortunately has properties in our area that are sitting out there depreciating and not showing any signs of movement.  They have a tendency to need some TLC and management along the way to disposal.  We are very active in today’s market, and LMC is here to provide solutions to matters of real estate hiccups”, stated Mr. Doherty.  “For example, they had a commercial property on one our barrier islands that had been taken back in default, had seen no activity and was beginning to deteriorate.  We took this property, analyzed exactly what the market would bear, recommended a suitable price that they could expect to realize in today’s market, compared this to the valuation on the lenders books, coordinated and agreed upon a good number and went to work on this.  In less than 2 weeks, we had a full price contract on it and closed it out all within 30 days.”  Real Estate in this area has seen periods of no activity since the financial meltdown and certain areas are hit harder than others.  Mr. Musser states: “It is a win win for everyone involved.  The property now can generate income for its new owners, the city and county benefits from its revenue in taxes collected, and the bank has one less headache on its books.”

The LMC Group continues to provide support to its business leaders, local municipalities, individuals, and lenders with their real estate worries.  LMC is a real estate solutions company that specializes in workouts for individuals, companies, corporations, developers (commercial and residential), and lenders.  You can google The LMC Group and find past projects completed on the web.  Currently, LMC is actively involved with numerous workouts from Morehead City to Myrtle Beach, SC.  For more information, please inquire on the website: www.lmcrealestate.com or call 910-383-1540

Asset Sale Completion in Under 30 days

Wake Up Washington, It’s about Jobs

lmc developers

Later this week, the Treasury Department will issue a report recommending changes to the structure of Fannie Mae and Freddie Mac.  This is the latest development in a years-long debate over what the government’s role in housing should be.

We all know better than anyone else just how vital housing is to families and to our nation.

Fact:  For every additional 1,000 home sales, about 500 jobs are added to the economy.  Those are real jobs that give our families, friends and neighbors a chance to work.

Fact:  Every home purchase pumps $60,000 into the economy.

Fact:  Housing accounts for more than 15 percent of the national gross domestic product.

Fact:  Home owners pay 80 to 90 percent of ALL federal income taxes.

We need to change the dialog.   Critics say housing is a drain on federal resources.  We know better.  Housing is the engine that drives our national economy. Eight of the last ten recessions have ended as a result of robust housing markets.  The other two ended as a result of war spending.  The choice is easy.  America needs a healthy housing market to thrive. 

In the days ahead, NAR will be reaching out to Congress and the White House to emphasize the clear connection between housing, jobs and the economy.  Rather than limit support for housing, and the availability of credit, NAR is calling on Congress and the White House to advance policies that will move the housing market back to a healthy 5.5 million sales, where it SHOULD be. 

We will be asking lawmakers to:

  • Preserve the mortgage interest deduction at current levels.
  • Move the credit pendulum to equilibrium, defined by a median credit score of 720.
  • Maintain government backing in the mortgage market as part of GSE Reform.

These three steps would help bring the housing market back to a normal level, possibly generating an additional 1 million home sales and 500,000 jobs.   

As the voice for real estate, we hope that Congress and White House gets the message:  real estate is all about jobs.

 Ron Phipps, 2011 NAR President

The LMC Group Announces Final Transfer of 147 Properties – $36 Million Impact

New Construction Dogwood LakesThe LMC Group today announced the successful revitalization and transfer of all properties within the community of Dogwood Lakes to its new owners.  Dogwood Lakes was a stalled development community hit hard by the decline of the housing market and recession.  Located in Surf City NC in Pender County, the community was started back in 2005 and came out for retail sales in 2007 at the beginning of the fall of the housing market.  In years 2007 through late 2009, like most real estate communities for retiring baby boomers, sales ceased and not one sale was made after its initial opening in Spring 2007.

The owner and developer had obtained The LMC Group’s information through a shared contact that knew that LMC was having success at re-establishing sales in stalled developments.  Based on her recommendation, contact was made with The LMC Group.  The LMC Group was hired in late 2009 to begin moving the owner/developer into a position to get out of the community and bring Dogwood Lakes back from the brink.  The LMC Group went to work on Dogwood Lakes creating a web presence and other key marketing studies, identified the marketplace for the product, and negotiated some slightly different pricing attributes involving the developer and the lender.  Once these vital studies were completed, everyone involved had some basis and options at their disposal now, and The LMC Group and Developer decided to move forward with the project.  Immediately in 2010, LMC placed 60 of the 147 lots under contract with a local builder that could deliver the product The LMC Group studies proposed.  Upon closing out these 60 sites, construction began again in Dogwood Lakes.  Construction is ongoing and vibrant today.  In December of 2010, The LMC Group closed out the remaining balance of Dogwood Lakes.  Construction is expected to be completed by year end 2011 creating a true success story in one of America’s worst recession time eras.  According to the original developer, “if it had not been for the contact and the implementation of The LMC Group and its programs, we would probably still be holding all inventory wondering what to do next. “

While this sounds like a great success story in terrible economic times, the unique underlying story is even better:  The LMC Group is directly responsible for creating over 100 new jobs in this area.  Subcontractors are back to work, HVAC contractors are back to work…. electricians, plumbers, landscapers, surveyors.  Nails are being purchased, roofing materials, lumber, garage doors, refrigerators, washing machines, fireplaces.  The economic impact of one failed community being brought back from the brink is astounding.  The statistics are overwhelming.  The lumber companies are working again, the cabinet makers, the carpet factories and distributers, the flooring companies, the cement companies, the Realtors.  Tax revenue is being collected to sustain infrastructure and services when once there was no revenue.  Without being exact, the estimated economic impact of just Dogwood Lakes is estimated at $36 million.  Wow, one deal, one revived community, heck of an impact.

According to The LMC Group CEO, Roy Holdford, “The LMC Group took our lumps in the downturn in the economy also, however, we vowed to make a difference, and if we can make even a small difference in helping to bring back our economy then we will have succeeded.”  Holdford also states LMC has big plans for 2011, “we have been highly involved in numerous deals on the table that should be coming to fruition soon, and one particular in mind may bring as much as $50 million in local impact dollars.  It is mentioned that LMC is currently working in Saltwater Landing in Surf City, Doe Creek Plantation in Holden Beach, along with 4 others that were not mentioned by name yet.  Asked if LMC was prepared for every failed project beating their doors down, Holdford stated, “The LMC Group will continue to add additional experienced professionals as needed to bring our economic situation into a better light.”

The LMC Group does have a void to fill.  “We have parties lined up for commercial sites and struggling office, retail and strip centers.  Sometimes people don’t realize we can help commercial owners as well, complete with leasing and financial analysis and getting your center back up and running”.  LMC’s recent additions of Dennis Musser and PJ Doherty echo these sentiments.  “We are out there spreading the news,” Musser stated.

For more information on The LMC Group, google “The LMC Group” or go direct to their site here: www.lmcrealestate.com

Billions in Bank Profits Not Yet Turning into New Lending

Even though commercial real estate [CRE] asset quality continues to improve gradually on bank’s books across the country, it has not translated into additional lending for commercial real estate. In fact, new lending continues to slide in all categories with the exception of multifamily.

New lending from banks on multifamily projects has increased by about $4 billion year to date. Outside of that category, lending activity continues at slightly declining levels for nonresidential properties and continues to fall off sharply for construction and development projects.

Still, a handful of banks have reported that demand has picked up slightly in the competition for quality loans.

For that reason and others, Federal Deposit Insurance Corp. (FDIC) chairman Sheila C. Bair is indicating that the end of a two-year period of contraction in loan portfolios may have run its course.

“Total loans and leases held by FDIC-insured institutions declined by just $6.8 billion, or 0.1%, in the third quarter,” Bair said. “Many large banks have had sizable reductions in their loan portfolios over the past couple of years, but in the third quarter, such reductions were notably absent. I hope we are close to seeing genuine increases in loan balances again.”

“The industry continues making progress in recovering from the financial crisis,” the FDIC chairman added. “Credit performance has been improving, and we remain cautiously optimistic about the outlook. Lower provisions for loan losses are driving bank earnings by allowing a larger share of revenues to reach the bottom line.”

But Bair also added, “at this point in the credit cycle it is too early for institutions to be reducing reserves without strong evidence of sustainable, improving loan performance and reduced loss rates. When it comes to the adequacy of reserves, institutions should always err on the side of caution.”

Commercial banks and savings institutions insured by the FDIC reported an aggregate profit of $14.5 billion in the third quarter of 2010, a $12.5 billion improvement from the $2 billion the industry earned in the third quarter of 2009. This marks the fifth consecutive quarter that earnings have registered a year-over-year increase.

The FDIC noted signs of further improvement in asset-quality trends as the amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) fell for a second consecutive quarter. Before these two quarterly declines, the industry’s noncurrent loan balances had risen for 16 consecutive quarters.

However, noncurrent balances increased in multifamily residential real estate loans (up $1.2 billion, or 13.6%) and in nonfarm nonresidential real estate loans (up $604 million, or 1.3%).

Insured banks and thrifts charged off $42.9 billion in uncollectible loans during the quarter, down $8.1 billion (15.8%) from a year earlier. This is the second quarter in a row that net charge-offs posted a year-over-year decline. Prior to the past two quarters of improvement, quarterly NCOs had increased year-over-year for 13 consecutive quarters. NCOs for most major loan categories declined year-over-year in the third quarter.

Real estate construction and development loan NCOs were down by $2.5 billion (32.4%), while NCOs of real estate loans secured by nonfarm nonresidential properties were $1.1 billion (46.2%) higher.

More banks are also continuing to report an increasing amount of asset sales. The number of banks reporting assets sales has increased 3.2% this year and the amount of assets sold in each quarter has increased 10.4% since the start of the year. In the past quarter 847 banks reported selling $53 billion in loans, leases and foreclosed assets not related to home, consumer or business loans.

As of Sept. 30, the nation’s banks reported having $36.1 billion in distressed CRE assets, which includes past due loans on and foreclosed construction and land development, nonresidential income-producing and multifamily properties. That amount is approximately 2.2% of all outstanding loans on construction and land development, nonresidential income-producing and multifamily properties. The third quarter amount is up from $29.4 billion at the end of 2009.

The number of institutions on the FDIC’s “Problem List” rose from 829 to 860. However, the total assets of “problem” institutions declined from $403 billion to $379 billion. The number of “problem” institutions is the highest since March 31, 1993, when there were 928. Forty-one insured institutions failed during the third quarter, bringing the total number of failures for the first three quarters of the year to 127.

MBA: Commercial and Multifamily Mortgage Delinquency Rates Mixed in Third Quarter

Separately, the Mortgage Bankers Association (MBA) reported this week that the delinquency rates for different commercial/multifamily mortgage investor groups were mixed in the third quarter. The bad news was that the delinquency rate for loans held in CMBS is the highest since the series began in 1997. The good news is that delinquency rates for other groups remain below levels seen in the early 1990s, some by large margins.

“Greater strength in the economy is bringing some stability to commercial mortgage delinquency rates,” said Jamie Woodwell, MBA’s vice president of commercial real estate research. “Commercial mortgage performance among most investor groups, including life insurance companies, Fannie Mae and Freddie Mac and commercial banks and thrifts, continues to be better than during the last major downturn of the early-1990s. Although weak, the economic recovery is just beginning to be seen in commercial real estate fundamentals and the mortgages they support.”

Based on the unpaid principal balance of loans (UPB), delinquency rates for each group at the end of the third quarter were as follows.

  • Banks and thrifts: 4.41% (90 or more days delinquent or in non-accrual);
  • CMBS: 8.58% (30+ days delinquent or in REO);
  • Life company portfolios: 0.22% (60+days delinquentt);
  • Fannie Mae: 0.65% (60 or more days delinquent); and
  • Freddie Mac: 0.35% (60 or more days delinquent).