Which way's the wind blowing for construction finance? It's hard to say with potential top-of-the-cycle headwinds, pro-business regulatory tailwinds, plenty of unknowns and unpredictable ripple effects, all while the lessons of the recession are still fresh in the minds of many.
So what's an institution to do when there's so much uncertainty? How does one chart a course? For one, proceed with caution, which is what we are seeing with many lenders hesitant to issue construction loans. But beyond staying in safe harbors, there's nothing like counsel and conversation with your peers and a healthy discussion of construction risks from all angles, which is exactly what the construction finance community is about to do next week.
Conversation as a compass
The annual Construction Lenders Risk Management (CLRM) Roundtable gathers again next week (March 6-8) in San Diego, bringing together lenders, investors and risk managers from across the nation to share insights, concerns and strategies to manage construction risks, regulatory challenges and current issues. This year's roundtable agenda is centered around where the construction industry is headed and how to navigate a new landscape of uncertainties and emerging issues –
- How would proposed changes such as overhauling Dodd-Frank or rolling back the HVCRE rule impact construction and finance? What requirements can lenders expect from examiners?
- Since risky construction lending practices were a major contributor to bank failures in the last crisis, what new or established construction risk management practices are lenders and investors employing to avoid the mistakes of 10 years ago? How much oversight is enough (or too much)?
- What emerging asset-level issues, like FASB changes or flood and seismic risks, should the construction and lending community have on their radar?
- How are data and technology improving construction and construction financing?
Representatives from top lenders and investors, the Federal Reserve Bank, Freddie Mac, technology and data firms, and engineering firms will all weigh in to address these questions.
Where to go from there
You can't navigate a risk if you don't know it's there, but risks can be addressed in a number of ways. Lenders, developers and investors view risks from different perspectives and different risk appetites. Each may deal with risks differently, but by sharing perspectives they are able to make more informed decisions.
No matter what the winds of change bring next, by promoting a common understanding of construction risks and best practices among investors and lenders, the Roundtable will help participants steer clear of the rocks in the next downturn.
If you are interested in joining the CLRM organization or event, click here or feel free to reach out to me.
Which way's the wind blowing for construction finance? It's hard to say with potential top-of-the-cycle headwinds, pro-business regulatory tailwinds, plenty of unknowns and unpredictable ripple effects, all while the lessons of the recession are still fresh in the minds of many.
So what's an institution to do when there's so much uncertainty? How does one chart a course? For one, proceed with caution, which is what we are seeing with many lenders hesitant to issue construction loans. But beyond staying in safe harbors, there's nothing like counsel and conversation with your peers and a healthy discussion of construction risks from all angles, which is exactly what the construction finance community is about to do next week.
Conversation as a compass
The annual Construction Lenders Risk Management (CLRM) Roundtable gathers again next week (March 6-8) in San Diego, bringing together lenders, investors and risk managers from across the nation to share insights, concerns and strategies to manage construction risks, regulatory challenges and current issues. This year's roundtable agenda is centered around where the construction industry is headed and how to navigate a new landscape of uncertainties and emerging issues –
- How would proposed changes such as overhauling Dodd-Frank or rolling back the HVCRE rule impact construction and finance? What requirements can lenders expect from examiners?
- Since risky construction lending practices were a major contributor to bank failures in the last crisis, what new or established construction risk management practices are lenders and investors employing to avoid the mistakes of 10 years ago? How much oversight is enough (or too much)?
- What emerging asset-level issues, like FASB changes or flood and seismic risks, should the construction and lending community have on their radar?
- How are data and technology improving construction and construction financing?
Representatives from top lenders and investors, the Federal Reserve Bank,
Where to go from there
You can't navigate a risk if you don't know it's there, but risks can be addressed in a number of ways. Lenders, developers and investors view risks from different perspectives and different risk appetites. Each may deal with risks differently, but by sharing perspectives they are able to make more informed decisions.
No matter what the winds of change bring next, by promoting a common understanding of construction risks and best practices among investors and lenders, the Roundtable will help participants steer clear of the rocks in the next downturn.
If you are interested in joining the CLRM organization or event, click here or feel free to reach out to me.
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Bill Tryon
As Director of Strategic Development, Bill Tryon focuses on advancing key risk management initiatives from an environmental, engineering and construction risk standpoint. Bill has a long track record of innovation, and hopes to educate the industry on best practices to control risks, reduce costs and create a competitive advantage. Through The Science of Real Estate forum, Bill will provide regular updates from across the CRE risk management world.
