Prepared Remarks of MBA Chairman Brian Stoffers, CMB, Global President, Debt & Structured Finance of CBRE, at the 2020 Commercial Real Estate Finance/Multifamily Housing Convention & Expo
SAN DIEGO (February 10, 2020) - MBA Chairman Brian Stoffers, CMB, Global President, Debt & Structured Finance of CBRE, delivered the following remarks here today at the 2020 Commercial Real Estate Finance/Multifamily Housing Convention & Expo.
[Please Note: These are prepared remarks. Mr. Stoffers may add to or subtract from these remarks during the course of his presentation. Portions of the text may be omitted during the speech.]
Thank you, Bob, for that kind introduction.
It is great to be back on my home turf. This is my crowd-- I eat, sleep, and breathe Commercial and Multifamily Real Estate. As I walked around the hotel this morning, I counted dozens of friends and colleagues who I've gotten to know over the years. We're talking relationships that started 10, 20, and even 30 years ago, right here at this conference.
It's a privilege to know so many of you and to work alongside you. And it's an honor to represent you as the Chairman of the Mortgage Bankers Association.
But this isn't just my crowd. This is also my community.
I've worked for Coldwell Banker, now CBRE, for my entire career, and in my first year on the job, way back in 1981, I landed in San Diego after beginning in the company training program in OC and LA. I lived here for more than 15 years, and my wife and I never thought we'd leave. But opportunity came calling in the way of an acquisition of the LJ Melody company in Houston.
We gave up the best climate in America for heat and humidity and wonderful people, schools, housing and no state income tax! My friends and colleagues in the business thought we were crazy. The silver living is that we always have an excuse to come back to San Diego nearly every year, thanks to this conference. I couldn't be happier to be right here, right now, in San Diego, with all of you.
This conference is the most important meeting for our industry. Our theme is "Where Market Makers Meet," and there's really no better way to put it. This is where the power players are. This is where the deals get made. And this was true way back when.
I vividly remember the first time I came to CREF. It was 30-some-odd years ago, and the setting was a little different. Back then, the San Diego airport was much smaller, and so was this conference. We only had a couple hundred people in a single ballroom in the Sheraton hotel over on Harbor Island. Raise of hands, how many of you were there back then?
But even then, what happened here mattered a whole lot. The truth is, this conference has never been about the sessions. The real action happens off-stage. Back in the day, there would be 50 people in the ballroom for a session, and about 250 people in the hallways. That's where the relationships got forged and the deals got made.
I know it's true because that's what I did. The acquisition that took me to Houston kicked off with a meeting in a hotel suite with Larry Melody. Since then, CBRE has purchased at least 10 more regional banking firms, and in nearly every case, the conversations started here.
I bet that each of you have similar stories. We've grown from 300 attendees to 3,000, but this conference hasn't changed much. What happens here shapes your companies for the coming year. And more than that, what happens here shapes our industry. You are the difference makers, so give yourselves a round of applause!
The Mortgage Bankers Association is committed to help you make an even bigger difference. As you just heard from Bob, we're delivering tremendous results for you. Over the past year, we expanded our networking and business development opportunities, giving you more opportunities to meet the right people and make the right deals. We increased our education and information services, giving you more and better research and valuable training courses that help you lead our industry to greater heights.
And of course, we've made significant progress on the public policy front.
The MBA is always in the room in Washington, D.C. I see it every week.
We make sure that policymakers know your priorities, whether that's with the Congress.
Or the White House. Or HUD. Or Treasury. Or with the FHFA.
We continue to push for Housing Finance Reform. It remains one of our main focuses, and we're making progress with the administration and Congress.
We kept flood insurance from becoming an impediment to your transactions. After two-plus years of short-term extensions, we got Congress to re-authorize it through September while negotiations on a longer-term fix continue.
And of course, we delivered for you and secured one of the most important achievements of the past decade. We got terrorism risk insurance reauthorized for a record 7 years, and we did it well before the December 2020 deadline.
The MBA is giving you the stability and certainty you need to thrive.
No matter how you look at it, the last year has definitely been "time well spent" for the CREF and Multifamily sectors. But I'm not up here to give the same speech as Bob. He focused on what's happening in D.C. I'd like to talk about the broader business trends, and how MBA can help you stay ahead of them.
When it comes to the future, this room is full of optimism. Last month, you told us that you expect commercial and multifamily originations to rise again in 2020.
Nearly two-thirds of you told us it's going to be bigger than last year, and nearly one-in-six told us you expect an increase of 5% or more. This dovetails with the MBA's latest forecast. We predict that commercial / multifamily lending will rise by 9% this year alone. That means you'll close a record $683 billion in loans.
As a CREF man myself, I never dreamed that these numbers would be possible. There's never been a better time to be in our industry.
That said, these opportunities won't seize themselves, and that's where the MBA comes in. We're here to give you the agility you need to make the most of the next year.
Agility is essential in our rapidly changing world. It will help us react to new developments as they arise, and it will help us shape events, before they happen. The more agile we are, the better off we'll all be.
To that end, I have chosen several key initiatives as MBA chairman. Two of the biggest ones are diversity and innovation. Both are critical for your businesses' agility in 2020 and beyond.
I'll briefly explain why I chose these two focus areas, then I'll tie them to the opportunities and challenges our industry faces.
I'll start with diversity. This has long been a passion of mine at CBRE, and last year, I chaired the MBA's Diversity and Inclusion Committee.
First and foremost, diversity is the right thing to do. People of all backgrounds and beliefs deserve the same career opportunities that I've had. Our industry can and should be a model for the nation.
Second, diversity is the smart thing to do. New people have new perspectives and can help us design new products and services. It's essential to keeping up with a changing and more globalized economy. A more diverse workforce will allow us to make a bigger difference for more families, clients, and business partners we serve.
Your success also depends on our innovation, which is MBA's second big initiative this year. I don't need to tell you how quickly the market is shifting. Confronted by change, our companies must innovate. There's no other way to be on the industry's cutting edge. That's where you belong-- and that's where the MBA will help you get and stay.
You don't have to be on the cutting edge, but you don't want to be left behind either. Diversity and innovation are especially important when you consider specific industry trends.
Consider something that I'm aware of every day: Global capital flows.
I just got home from Hong Kong, and I can tell you that foreign buyers are more interested than ever in the U.S. market. Huge sums of money are pouring in from Australia, Singapore, and South Korea. The same is true from the Middle East. China's growth may be slowing down, but global interest in American property is still soaring.
Foreign buyers are now looking beyond the usual gateway cities on the coasts. Secondary markets and smaller cities are snapping up investment like never before. Your businesses are always looking for better ways to serve these clients. That requires diversity, which will give us a better insight into what they want.
It also means innovation. The more we embrace these two concepts, the more agile we'll be, and the more we will benefit from the growth opportunities of the globalized market.
The MBA team is here to help, with research, training, and other opportunities.
The same is true with national workplace trends. Like many of you, I watched what happened to WeWork with great interest. It was sad, but somewhat predictable, to see the company's struggles, but we shouldn't mistake it for a rejection of that business model. We estimate that shared workplaces will rise from about 2% of the current market to between 10 and 15% in the future. We're hearing from corporate clients that they're looking to put as much as 15% of their workforce in a shared environment.
A new focus on diversity and innovation will enable your companies to meet their needs. A younger and more varied workforce can help us understand what start-ups and other up-and-coming firms want. We can also take new steps to ensure that we have what they want, before they want it.
Once again, the Mortgage Bankers Association is at your beck and call. Our teams are ready and able to assist you, whatever your needs may be. They're the best in the business, and they'll help your businesses succeed.
In the coming months, you'll see the MBA take more steps to encourage diversity and innovation in our industry. You'll also see us continue to get results on policy, whether it's fighting rent control or promoting common-sense regulation. Everything we do is designed to make you more agile and effective.
Yet before I leave, there are three things I'd like to ask of you. First, I urge you to sign up for the Mortgage Action Alliance. It's the biggest grassroots lobbying organization in the industry, and it helps us get good policies across the finish line in Washington, D.C. Signing up is free, and participating
is easy. All you have to do is download an app. When a key policy comes up, you can just click through the automated process to send a message to your Senator or Representative.
I've seen how this gets results. As MBA Chairman, I have met with many elected officials, and I can tell you that it makes a huge difference if they've heard from our members before we walk in the door. We probably could have got TRIA reauthorized even earlier if we had stronger grassroots engagement. For your sake and your success, I hope you'll get involved with MAA today. And remember, it's free. All it takes is a few minutes of your time.
Second, I encourage you to get engaged with the MBA's political action committee, MORPAC. It enables you to support candidates who defend the cornerstone of the American Dream. This election year is the perfect time to sign up, or to step up your involvement. It's an investment in your business that will pay dividends down the road. I personally support MORPAC because I've seen it make a difference. So will you.
Finally, I hope you'll all consider supporting the MBA Opens Doors Foundation.
Through this amazing program, we help families caring for their critically and terminally ill children, providing them with mortgage and rental payment grants.
My wife and I have been involved for years. We've chosen Opens Doors as one of our personal charities, and because the MBA pays 100% of the Foundation's administrative expenses, 100% of all donations go to the families who need it.
Here is a little bit more about Opens Doors. Take a look.
To the members who support Opens Doors -- thank you. To the members who are considering a donation, I say: Families are counting on us, so let's all step up.
There's much more I could discuss, but as I said earlier, this is a conference where the action happens off-stage. Like all of you, I've got a full calendar here and don't need to drag on.
The last thing I'll say is that it's a privilege and an honor to serve you in this capacity. You truly are the difference makers, and the Mortgage Bankers Association is your biggest ally.
We are One Voice, One Vision, and One Resource, at your service.
Thank you for your support and thank you for all that you have already done, and all that you will do in 2020 and beyond.
Enjoy the conference. I'll see you in the hallways.