Banks' entry alarms Realtors - Philadelphia Business Journal:

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The Federal Reserve Board and the Treasur y Department have proposed a regulation that would allow banks to handle brokerage and propertumanagement work, taking a bite out of some of the core taskzs conducted by a Realtor. Unde the proposed rule, banksw could market homes for sellerws and lineup buyers, as well as leaswe and manage properties. The beauty of such a regulation for the bankas is that they could be the originator of mortgagees on the properties and also try to sell the parties on othe rbank services. The banks also contend that this woulxd streamline realestate transactions.
Not surprisingly, the Nationalp Association of Realtors is having a fit over the proposap and is fixing tofight it. It has ralliefd its members to oppose the proposal betweeb now andMarch 2, the end of a designate d comment period. No word yet from commercial real estate groups on their positiohn on the matter even though it will also applh totheir work. Clearly, Realtor s want to protect what they considers theitr territory and fear thatthe rule, if adopted, woul lead to a deterioration of The national association believes that the rule would open up the floodgatesx for banks to gobble up small and large real estatee agencies to gain market share and even drive some brokerageds out of business.
In several large banks could dominat e the realestate industry, according to the The organization also believes that it would be only a matterd of time before just a few large bankz would control the real estate brokerage, relocatio n and management business. The proposal woulr not only affect residential real estatr but alsocommercial properties, permitting banks to handle leasea negotiations, rent collections and sales. Anothef of the association's fears is that banks will be more concerne d about hawking their services during a real estates transaction and will not adequately serve the needd of a home buyeror seller.
"Banking-controllesd real estate brokerages will become marketingf arms of mortgage departmenta and other servicesbanks sell," the association said in a "We're concerned they will be more interested in makinv a loan or selling mortgage insurance than helpiny a buyer find the best The group also contends that such a relationship could lead to higher costxs if banks decide to bundle and cross-sell products and serviceas through its captive real estate brokerage Lastly, the association said it's also worried that banks will shared confidential customer financial data with theirr real estate brokerage divisions, which coulfd create an "unfair competitive over independent Realtors who don't have access to such information.
The rule at referred to as the Gramm-Leach-Bliley Act of is the same rule that allowed banksd to enter into the securities and insurancebusineses . One of the more interesting highlights from the recengannual Insignia/ESG forecast meeting concerned the industrial real estate By all accounts, industrial spac continues to be tight, with rentz on an upswing. In the western suburbs, whicb have more than 154 million square feet of industrial the vacancy ratewas 7.7 percent with rents ranging between $4.24 to $5.254 a square foot. Noted was the constructio of several buildings inthe 40,000-square-foot to 60,000-square foot ranged instead of the larger shells.
About 750,000 square feet of industriapl space constructed last year were in these smaller In Philadelphia, it's not just rentsa that are going up but the price of industria land, too. Demand for properties in KeystoneOpportunitu Zones, which grants certain tax relier to owners and businesses locating there, has drivenj up the price of industrial land during the last according to the brokerage. For example, the pricer for an acre in Northeast Philadelphia stoodat $77,0000 an acre at year-end compared with $52,009 an acre the previous year.
GMAC Commercial Mortgage basedin Horsham, Montgomery has established GMAC Institutional Advisors LLC, which will focue on the real estate investmengt needs of institutional investors. GMAC Commercial has receiveed approval for the new subsidiary from the Securities andExchangew Commission. The company's investment management business had centered exclusivelyh on commingled investment vehicles thatacquiredf below-investment-grade commercial mortgage-backed The new subsidiary will branch out to include investment-gradre securities and also offer a variety of equity GMAC Commercial already has $1.
8 billiobn of assets under management, including abougt $1 billion of CMBS investments and $800 million in a proprietary real estatwe portfolio. Two Center City architectural firms have been retaine to handle what is considered one of thelargesf -- if not the largest -- casino-hotel project in Atlantic The joint venture firm of Bower Lewis Thrower and Cope Lindere Associates were commissioned by big casino operatorxs Boyd Gaming and MGM Mirage to complete The Borgata, the first Las Vegas-stylee mega resort to hit Atlantic City. Boyd Gaminv and MGM Mirage are doingthe $1 billio n project in a joint venture. The Borgata, or village in Italian, will boast an Italiajn motif.
It will have a 2,010-rook hotel as well as a 120,000-square-foot 11 restaurants, shops, and a European healthy spa, among other