If You Want To Hit Your Production Goals In 2023, Don’t Get Distracted By All The Doomsday CRE News!

There is no doubt that it is a tough economic environment! We have turmoil in the financial services industry, credit is tight, office vacancies are up, and many of the pundits are serving up a lot of doomsday news! Doomsday news is like a flash flood. If you are not careful, you will get swept away by it and your performance will tank! Don’t let the bad news distract you! Otherwise, you will become one of the victims!

 Everyone is talking about the impending CRE implosion. All the credit teams across the nation at all the banks are running for shelter. Ok! Maybe I am exaggerating a bit, but the credit folks are definitely very scared! The thing that frustrates me is that the risky CRE is not the owner-user properties or the small investor CRE deals that most Business Bankers come across! Owner-user office is still performing. It is the large multi-tenant office buildings that are in trouble! Even small investor office is still performing.  

 In every economic environment there are businesses that are thriving and those that are hurting. As a Business Banker, you need to figure out which industries are thriving and go after them! Use tools like VerticalIQ, D&B Hoovers and Google search to create a list of industries that are thriving and build a leads list using this research insight. Here is a small list of industries that are doing well in the current economic environment: accounting firms, bookkeepers, payroll services, legal services, oil & gas, commercial & industrial equipment rental & leasing, medical professionals (dentists, physicians, vets), property management services, real estate brokerage firms, outpatient care centers, schools, mortuaries, mining and the list goes on!  

 Don’t say no just because your credit team is currently scared the sky is falling!  I’ve been through many of these cycles. If you become distracted and get swept away in the doomsday news, you will not survive!

 In a tough economic environment, you will need to do a good job of prequalifying your prospects before you approach your credit team. You will need to identify and mitigate the weaknesses and really sell your credit team on the strengths of the deal. I recently published a LinkedIn article on how to prequalify your prospects. Here is the link: https://www.linkedin.com/pulse/prequalify-your-business-banking-prospects-5-easy-steps-castillo/?trackingId=jlCkBB%2F6Q3GXazmjYrpRhw%3D%3D

 Owner-user CRE is a winner in any type of economic environment. Even owner-user office and retail! If you follow my prospect pre-qualifying advice, you will significantly increase the probability that you will get your deal approved! If you don’t do your homework, don’t be surprised when you get a “no” right out of the gate! I had my best years in business banking during economic downturns! Why? I did what I am telling you to do: stay focused, double-down on marketing efforts to find the businesses that thriving, and do a good job of prequalifying prospects!

 If you have a challenging deal (low DSC, high LTV, risky industry, investor bridge or construction CRE, etc.) and want to help your prospect get funded, call me at 310-210-4571. I can help! Good luck out there!