Large Bank Supervision Forum 2023

GCV Vs. MV: What do Appraisals Measure? A Decade Later, we still ASK What is the value proposition from an appraisal?

https://www.nytimes.com/2012/05/09/realestate/commercial/appraisals ‐ overvalue ‐ real ‐ estate ‐ study ‐ finds.html

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Emerging Issues & CRE Risks in 2023

 Inflation & Interest Rates (ReFi Risk/Maturity Defaults top the list of risks “Chainsaw Massacre”)  Household Debt (A new record of $16.9 trillion and Credit Card Debt a record $1.0 trillion.)  Housing (In as severe a recession as 2009)  West Water Crisis & Colo. River Basin States. (A “Material Change” in value for large West MSAs like Las Vegas, Phoenix and Denver with less water & electricity – Hughes Corp example in Phoenix)  CRE Trends: ULI Emerging Trends 2023, U ‐ Haul Moving Report, CCIM Institute CREPI & CRE Values (CPPI and Hotel to surprise with “Bu ‐ Leisure”)  Retail (Store Closings still with us!)  Remote Work & Office Building Values (Valuation decline is going to be severe (30% ‐ 50%)  Logistics, Remaking the Supply ‐ Chain & Industrial

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