Welcomes you to the 2010 NC-CCIM Triad Commercial Real Estate Market Forecast.

Welcomes you to the

2010 NC-CCIM Triad Commercial

Real Estate Market Forecast

Vital Statistics• Headquartered in Charlotte, North

Carolina• Subsidiary of BB&T• One of the nation’s largest

commercial mortgage bankers• Servicing portfolio of $24.5 billion• 26 production offices in 16 states

plus the District of Columbia

Grandbridge Real Estate Capital

SERVICESSERVICES• Permanent and Interim Loan

Placements»Fixed Rate or Floating Rate

• Acquisition/Bridge Financing• Mezzanine Loans• Preferred Equity• Developmental and JV Equity• Note Purchase Financing

Grandbridge Real Estate Capital

Grandbridge Real Estate Capital• Freddie Mac Seller/Servicer

• Fannie Mae DUS Lender• MAP and Lean Approved HUD

Lender• Insurance Company Correspondent• BB&T Real Estate Funding –

proprietary bridge lending platform

• Access CMBS and “non-traditional” lenders

Grandbridge Real Estate Capital

•Charlotte Production»6 People»2 CCIM’s»$2.4 Billion 2000 – 2009 in 383 deals

Review

Where have we been?

What Happened?

• Capital adequacy questioned

• Liquidity evaporated• True asset value

incalculable• Transactions stalled

»Inability»Unwillingness

What Happened?

• 2007 - CMBS Issuance = $230 Billion

• 2008 - CMBS Issuance= $14 Billion

• 2009 – CMBS Issuance= nil

• 2010 – CMBS Issuance= re-hiring, limited lending, priming

the pump

What Happened?

• 2007 – Insurance Company Commitments= $42.7 Billion

• 2008 – Insurance Company Commitments= $24 Billion

• 2009 – Insurance Company Commitments= $16 Billion

• 2010 – Insurance Company Commitments (Expected)

= $32 – 36 Billion

Can you finance multifamily and

commercialreal estate??

SURE! (cautiously…..)SURE! (cautiously…..)

Lender Types Active Today•Insurance companies

•Freddie Mac; Fannie Mae; FHA/HUD

•Bridge lenders•Mezzanine lenders•Preferred equity providers•Banks•CMBS Lenders•Non-traditional lenders

Loan Types Available Today• Immediate funding interim and

permanent loans»Acquisition, refinance»Fixed or variable rate»Bullet or self-amortizing»3 to 20 year terms (30-35 for multifamily)

»Amortization 15-25 years with some 30- year schedules and limited interest-only

Loan Types Available Today (cont’d)

•Forward commitments are tough (3+ months)

•Credit tenant lease (CTL)•Acquisition / bridge loans•Mezzanine and preferred equity•Note acquisition financing

Loan Characteristics• Tighter underwriting

•Submarket vacancy or actual•Above-market rents may be adjusted

downward•Higher cap rates•Lower LTV, although some recovery

• Collections, debt coverage and debt yield are king

•1.20 - 1.25x DCR•11% debt yield

Loan Characteristics

•Borrower is key•Primary and secondary markets•Fundamentals must all be in

place•Amortization is critical•Recourse is back in some

instances

Rate Comparison

• Pre-meltdown10 year Treasury = 5.26%

Spread = 100 basis points Coupon = 6.26%

Rate Comparison

• Present day10 year Treasury = 3.76% (as of 3/12/10)

Multifamily Spread = 190 - 220 basis points

Coupon = 5.65 - 5.95%

Commercial Spread = 225 - 325 basis points (+/-)

Coupon = 6 - 7%

Conclusions

• LT debt loosening in 2010• Uncertain regulatory environment• Banks may apply pressure or

bifurcate loans• Borrowers may be forced to

choose asset capitalization• Equity requirements greater and

new construction will be slow

Panel Discussion

•Don Dibble, Lincoln Financial Group

•Rich Martinez, Freddie Mac

Panel Discussion

Rich – What’s up with the GSE’s? Are Freddie and Fannie going to be around in the future, and how has your conservatorship with FHFA affected how you do business?

Panel Discussion

Rich – What is your near term view of the multifamily sector and what is your focus for 2010 and 2011?

Panel Discussion

Don – Does Lincoln have an appetite today for commercial real estate loans and, if so, why?

Panel Discussion

How are you underwriting loans today? What factors are the most important to you? What are the hot buttons? How has this changed over the past 12-18 months? Don? Rich?

Panel Discussion

Don -- How easy is it for you to ascertain your cost of capital; how has it changed over the past 12 months; how volatile is it and how has this impacted your lending activities?

Panel Discussion

When you quote a spread or rate, for how long is the pricing good? Rich? Don?

Panel Discussion

Don – What advice can you give to a borrower who finds him/herself in financial trouble, either on a particular deal or in general?

Panel Discussion

Rich – Freddie and Fannie have had an 80% market share of the multifamily finance arena over the past 12-18 months. Do you expect this to continue; do you have any concerns with this concentration?

Panel Discussion

Don, what aspects of a loan should a borrower consider beyond just loan amount and interest rate?

Panel Discussion

Rich, does Freddie Mac have any new products on the horizon?

Panel Discussion

Don – Several conduits started hiring and talking about quoting deals. Can this market get back off the ground, and what do you think it will take in order for that to happen? When? What will the deals look like?

Panel Discussion

Will you permit secured secondary debt, mezzanine loans or preferred equity

behindloans or preferred equity behind your

first mortgage? Why and why not, and if

“yes” withwhat parameters? Rich? Don?

Panel Discussion

Rich – How has your North Carolina portfolio performed; how do you feel about our markets in general and Greensboro, High Point and Winston-Salem in particular?

Panel Discussion

Don – What property types and markets in North Carolina are most appealing to you? Which are not and why?

Panel Discussion

What impact will deleveraging play in the viability and valuation of real estate markets?

Panel Discussion

What keeps you up at night?

Panel Discussion

What is it that you do best that helps you compete and win business, and why should borrowers borrow from you?