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Panel: The New Rules Are the Old Rules

NEW YORK CITY-A CCIM panel Wednesday explored the capital markets landscape in an era of tighter lending, government intervention and shoes that have yet to drop.

By Paul Bubny | Updated on May 06, 2009

NEW YORK CITY-The view of the capital markets landscape looks different from 50,000 feet than from closer to ground level, but either way it reveals the effects of the financial system’s near-collapse last fall. At a higher altitude, one sees the federal government’s overarching plans to shore up the system; a lower-flying perspective zeroes in on the realities of today’s lending environment. A panel on Wednesday sponsored by CCIM’s New York metro chapter surveyed the landscape from both vantage points.

John Adams, first VP at NY Community Banks, offered an answer to the question posed in the event’s title, “What Are the New Rules? Lending, Banks, Assets and Your Real Estate Business.” For lenders as well as those seeking credit this year, said Adams, “The new rules basically are the old rules.”

Those old-is-new rules include: focusing on an asset’s cash flow and going-forward expenses, a ratio of 1.2 or higher in debt service coverage, requiring the sponsor to put in equity, doing the homework about a potential customer’s business circumstances and keeping deal size at a level the lender finds comfortable. “Don’t put more out than you’re willing to lose sleep over,” Adams advised.

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