Commercial real estate recapitalization required to avert catastrophe

Commercial real estate (CRE) is a five trillion dollar industry supporting twelve million jobs.  With CRE property values down 40% since 2007, most observers believe that this sector is under severe stress.  We do not have the leisure to adopt a “wait and see” approach.  We must act now to ensure that CRE is not a deterrent to our economic recovery.

Stakeholders in CRE include pension funds, small business owners, construction companies, developers, and lenders (to name a few) who could face a second wave of macroeconomic stress just as conditions are improving.  With a nine percent unemployment rate, this point should give every American pause.

The scope of the problem is enormous.  Total rolling debt maturities from CMBS, insurance companies, and banks and thrifts is $1.42 trillion through 2014.  The Mortgage Bankers Association has reported that two-thirds of commercial securitized loans and one-half of whole loans won’t qualify for rollovers or bank refinancing when they mature. Given the sharp decline in CRE property values, many of these loans will also require additional equity to refinance – a serious problem for most owners and developers, whose balance sheets have been decimated in recent years.

Even so, and strange as it may be, almost all of the related media buzz has been about the distressed banks, how under-reserved banks are hurting, and how government rushed to aid them with many billions of dollars in bailout money that the U.S. Mint couldn’t print fast enough.

There is no question that banks are hurting. But what about the thousands of distressed commercial real estate owners and developers who could be wiped out? They seem to be the forgotten casualty in this crisis, and too few in leadership seem to be doing anything about it.  A further loss of jobs in the CRE sector could be devastating to our fragile economic recovery.

The hard truth about the crisis is that if owners can’t recapitalize their property, they may have to short-sell the property (if they can find a buyer), losing all their investment and – adding salt to the wound – be taxed on the forgiven debt. Alternatively, they may have to declare bankruptcy, or as some already have done out of desperation, just give the keys to the bank and walk away.

There is another option that is better than the aforementioned alternatives. It’s an option that will help mitigate some of the terrible financial pain that owners and developers will feel across the country between now and 2014.  It’s call recapitalization.  The challenge for the owner however is to find the alternative capital sources that will provide the equity and new debt required for recapitalization.

At Impact Business Accelerators, we have spent the past three years identifying well-funded lenders and investors that are ready, willing, and able to recapitalize troubled commercial real estate assets across the capital stack.  Over the next few years we plan to play an active role in the solution to this ongoing and challenging CRE problem.

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Debt ceiling talks a sideshow to unemployment challenge

Why is the country fixated on this sideshow?  The real problem is a slowing economy and a lack of jobs.  Deficit reduction will result in a lose of jobs as government workers are handed pink slips.  Higher unemployment will result in lower consumption, putting a damper on the economy.  This debt ceiling crisis, if unresolved, will be a self-inflicted wound and an unnecessary distraction to solving the real problems we face.  What a mess!

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How small business can exploit current market conditions

The continuing devaluation of the dollar will force cash-rich companies to deploy their capital and buy assets.  We believe that you should position your company for acquisition or leverage your cash to buy market share now.  Borrowing costs are at historic lows and you will pay back the debt with inflated dollars.  Impact Business Accelerators has access to capital to leverage your investment.

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Jobs are the key

No jobs and less government will lead to reduced consumer demand causing economic malaise or recession and a lose of more jobs — a vicious cycle that must be broken.  Our leaders need to focus on job creation with a sense of urgency.

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Seven Ways to Build Your Email List

Email marketing has become standard business today.  This article from Neil Anuskiewicz succinctly explains the best strategies for building an email list.  www.smartbiz.com/article/articleview/2510/1/53

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Impact Engaged to Recapitalize Office Building

Impact has been hired by a Mesa firm to provide financing advisory services and assist in recapitalizing their executive suites/office center property.

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Capital Markets Beginning to Thaw

Lenders and investors are beginning to open up their checkbooks and write checks.  The better commercial real estate properties in the primary markets are receiving financing.  The banks are lending to credit worthy business owners and stable businesses, albeit, not at previous levels seen before the financial collapse.  At least we’re moving in the right direction.

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Stay ahead of the competition

You’ve been in business for several years and all the hard work is starting to pay off. Now is the time to accelerate the growth of your company.

Impact Business Accelerators exists to serve companies like yours. Our clients seek greater sales volume and profits, capital to fuel their growth or complete a project, and new innovations to stay ahead of the competition.

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K-Motion Interactive introduces an all-new K-Vest TPI 3D Edition

Golf News
April 21, 2008

BEDFORD, N.H. — K-MOTION Interactive has established a new relationship with industry leaders Titleist Performance Institute and Advanced Motion Measurement. The Advanced Motion Measurement partnership provides K-MOTION Interactive with access to proven biomechanical science and to further research, development, and new product opportunities. Titleist Performance Institute and AMM have provided K-MOTION Interactive’s K-VEST technology with an enhanced software platform, called TPI 3D, that could standardize 3D motion measurement in the golf industry while also providing 3D motion of the best PGA and LPGA players in the world.

Tom Dusenberry, CEO of K-MOTION Interactive comments, “the relationship with both Titleist Performance Institute and Advanced Motion Measurement is the completion of an ongoing effort to upgrade our K-VEST product offering to be the standard in performance improvement via accurate motion capture and analysis. Our new strategic partners will allow K-MOTION Interactive to provide the highest quality of motion capture products while offering new and improved programs for product training and support.”

The K-VEST TPI 3D edition is a new, all-in-one solution for golf instruction. By combining video analysis, 3-D analysis, and real-time visual and auditory feedback, the completely mobile system will accurately calculate motion parameters of the swing using the new TPI 3D software. TPI 3D is a powerful three-dimensional motion capture software platform that analyzes the 3D motion of a golfer’s swing and allows the coach or player to quickly compare the selected swing to the PGA and LPGA tour’s elite.

Greg Rose, co-founder of the Titleist Performance Institute and host of the popular show Golf Fitness Academy on The Golf Channel, comments, “This new combination of TPI, AMM and K-MOTION technologies helps each of our companies. K-VEST TPI 3D Edition will allow Titleist Performance Institute to deliver our new software platform to a broader customer base ultimately improving golf performance to the mainstream golfer. ”

Phil Cheetham, President and Chief Technical Officer of Advanced Motion Measurement authored the AIM-3D software used to power TPI 3D. A pioneering Biomechanist, Phil is also an Olympian in gymnastics. He is in the unique position of bringing together theory, practice and software implementation to maximize human physical performance. Phil comments, “K-MOTION Interactive is clearly committed to delivering the highest quality of motion analysis products to the marketplace. These partnerships will allow us to collectively deliver the K-VEST TPI 3D edition to the golf and fitness marketplace. We look forward to successfully launching the K-VEST TPI 3D edition to the global golf markets.”

Donavon Ostrom, CEO of Advanced Motion Measurement comments, “the combination of these technologies will now allow us to release the most accurate and cost-effective wireless motion capture and training system on the market.”

About Titleist Performance Institute
The Titleist Performance Institute was created to provide players with a total game learning experience by combining training techniques for the golf swing and physical strengthening and conditioning. They have combined industry leading experts, state of the art technology, and world-class facilities to enhance the performance of athletes. To learn more about TPI visit www.mytpi.com.

About Advanced Motion Measurement
Advanced Motion Measurement is a software company that develops products and provides services to capture, measure and analyze human motion. AMM’s software is applicable to any use in which the accuracy of motion measurement is critical. Thus, it is used to analyze movement characteristics and improve human motion. AMM’s suite of motion measurement tools can be used as a complete motion measurement solution or components can be selected to enhance your current motion measurement system. To learn more about AMM please visit www.advancedmotionmeasurement.com.

About K-MOTION Interactive
K- MOTION Interactive, a leading sports motion analysis company specializes in developing wireless technology to objectively measure, analyze and improve the efficiency of human motion. The Company’s mission is to bring innovative, affordable and easy-to-use 3-D technology to the sports performance and fitness markets. Please visit www.k-motioninc.com for more information.

For more information on K- MOTION Interactive, please contact Tom Dusenberry by phone at 978-828-7825 or by

 

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Arizona companies go global for growth

Jan B. Jacobson
The Arizona Republic

 

For Arizona companies trying to extend their reach beyond North America, the global marketplace can be vast and confusing. Foreign labor laws, confusing import and export duties and the fundamental difficulties posed by the language barrier keep many business owners at home.

But for those who venture out, the rewards can be great.

“I believe that working online has been a boom to globalization, bringing everything to our fingertips. Even small companies can benefit from and tap into international markets and resources for growth,” said Omar Sayed, founder and chief executive of Succeed Corp.

Donavon Ostrom (right), managing director of Outsource International in Scottsdale, works with Professor Morteza Abbaszadegan at an ASU lab.

He and executives from Kahala Corp. and Outsource International are among those who have discovered the benefits of doing business abroad, and they have some tips for the internationally minded business owner.

 

“It’s important to have an outlook that is open to seeking opportunities outside of the United States,” Sayed said. “It was very favorable in our case, finding development partners. We leveraged a strong U.S. dollar to develop our technology at a fraction of the cost. As a result, we were able to pass savings to our customers and offer our product at a competitive price, which fueled our growth.”

Mesa-based Succeed Corp. is the fastest-growing software company in Arizona. The company offers a suite of Internet-based e-commerce tools, the most popular being iBuilder. It was just listed as No. 50 on Inc. magazine’s top 500 growing companies.

Sayed is a native of India and has lived in 35 countries. He has worked with import-export businesses since he got out of college, where he studied computer science and physics. He started the company in Florida but moved it to Arizona 15 years ago. The self-funded company employs 180 in Mesa and 100 internationally.

“You must do preliminary research . . . communicate online, then must travel and meet face to face to develop the right teams,” Sayed said. “Many companies don’t see working abroad as an opportunity and are intimidated by the idea because of concerns with the language and the unknown.

“English is widely used in many distant centers and is not a barrier. Companies abroad are very receptive to American companies. There is a level of risk dealing with other countries, but it can be overcome. Business knowledge, trust and respect are important to international partners.”

Do your homework

Lee Knowlton, president of the international division of Kahala Corp. in Scottsdale, said, “The biggest challenge to expanding globally is to find the right country and right partners to launch successfully. You must do due diligence before you go, researching and identifying potential partners for your product or service. You must be prepared to provide ongoing support and commitment and to dedicate resources to make the opportunity strong and successful.”

Knowlton should know. His company is one of the fastest growing in North America in the business of franchising, developing and marketing for quick-service restaurants. This privately held corporation operates in 15 countries worldwide with 13 brands, including Blimpie, Taco Time and Cold Stone Creamery, with 4,600 retail locations and sales of $1.1 billion. It has nine people in its international division supported by 200 in its domestic operation.

But he cautioned, “You must stay true to your concept and realize that you may not be able to just pick up your product and take it. You may have to tweak it.”

He explained that when the company opened Cold Stone in Japan, customers wanted more fruit-based ice creams, and in the Middle East, they wanted coffee offered with the ice cream, so Kahala modified its menus accordingly.

“There is so much opportunity outside the United States,” Knowlton said. “We bring our own unique experience and grow the brand internationally. If you feel you have to change your brand or experience to go into a country, you shouldn’t go there. Stay within your experience. . . . Getting out of your area of expertise leads to failure.”

Follow the money

Donavon Ostrom, managing director of Outsource International in Scottsdale, has been doing business abroad since 1994. He joined with Richard Mahoney, former Arizona secretary of state and a former professor of the Thunderbird School of Global Management, to help Arizona companies evolve by providing early capital and people to run them.

Outsource International also offers business-acceleration services to emerging companies, including sales, marketing and management support, and assistance raising capital.

Outsource International has spent 14 years creating jobs and building companies here that have a global reach.

World as marketplace

“To be successful in business today, you have to look to the international marketplace and to sell throughout the world,” Ostrom said.

“We have the ability to reach out around the world, to help clients enter new markets and generate more opportunities for their products and services by bringing relationships and resources to the table.”

Ostrom says the biggest issue for global outreach is being properly capitalized.

“You have to have the right resources in place, both human and capital to succeed,” he said.

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