Brandy Smith is a commercial real estate professional with 23 years of business experience, primarily within the commercial division of large financial institutions. Through a series of acquisition opportunities in the financial industry, Brandy worked with JPMorgan Chase Bank for 16 years in a variety of leadership roles. Brandy transitioned into a business development role at Auction.com, now Ten-X, in 2011 and quickly elevated into a sales leadership position. guiding the institution through a series of acquisition opportunities in the financial industry. Brandy most recently works with CREXi in the role of Institutional Advisor.
We spoke with Brandy to gain her valuable insights into the state of commercial real estate, the impact of the coronavirus, and what advice she recommends to navigate the unfamiliar terrain of CRE in the wake of current events.
CREXi: Given the current circumstances, how do you see commercial real estate auctions playing a role in the future of the industry?
BS: Auctions provide a unique opportunity for both sellers and investors to transact in any economic environment. While auctions provide a transparent process for all parties, investors benefit by having an impartial playing field. Investors have the discretion to determine if they want to purchase the real estate by being the highest bidder — in other words, they control the price. Sellers benefit from the competitive environment and certainty of close.
CREXi: How do you see institutional partnerships playing a role at CREXi?
BS: Past CRE technology has not met user’s expectations for an intuitive end-to-end solution. CREXi is transforming the industry and becoming the industry standard in technology and relationships. I believe institutional partnerships will take CREXi to the next level and institutions will lean-in and adopt the user-friendly technology CREXi has to offer.
CREXi: How do you envision institutions revising their investment strategies in the wake of coronavirus?
BS: I don’t think anyone knows what the future landscape of CRE will look like for certain; however, as the institutions assess their portfolio risk, I believe we will see a wave of note sales within the next year.
CREXi: Our internal data show a 157% increase in loan note user activity since January — what is your take on their relevance in the current and future CRE climate following the impact of coronavirus?
BS: There is generally a sales cycle during economic downturns. When a borrower stops paying and a loan becomes non-performing or even sub-performing, the lender generally goes through a loan-by-loan analysis. They make a decision on whether to sell the loan, take it through the foreclosure process, approve modifications or forbearance, or hold to maturity.
There are several factors in determining holding the loan versus selling the loan. These factors include the cost of foreclosure, reputation risk of foreclosing on certain property types and/or borrowers, and the amount of loan loss reserve associated with the respective loan. Since it takes time to foreclose and ultimately take the property to market, the market generally sees loan sales earlier in the cycle. I think we will begin seeing more loan sales once lenders and owners are able to go through credit/risk analysis of their portfolios.
CREXi: How do you view technology’s role in the future of CRE, considering the impact of COVID-19?
BS: In the past, CRE technology has not met user’s expectations. The industry as a whole generally has fragmented and manual processes, lacks data integrity, and incurs a high cost to do business. CRE technology platforms such as CREXi are changing the way we use technology and do business. The process is streamlined and the technology is intuitive and continues to evolve; therefore, the adoption rate is higher. As we continue to rely more on technology, I see standardization within the industry and users leaning-in to new technology concepts.
CREXi: What advice would you give your clients during this time? What advice would you give your colleagues?
BS: Reflect on your purpose and prioritize the relationships in your life. Remember to be kind and humble. You don’t know what others are going through. And… when you are finally ready to sell your real estate, CREXi has the market reach, intuitive technology, and best-in-class process and people to handle all of your CRE transaction needs!