Building Industry Magazine - April 2013 - (Page 16)

FINANCE, BONDING AND INSURANCE: More Capital, More Confidence — Last year at this time, we were told by those in the finance, bonding and insurance marketplace that the construction industry had begun to move forward, “but at a very slow pace.” There seemed to be “a potential for more private projects and military spending.” “But we are still not out of the woods,” we were cautioned by some members of the financial sector, while others felt 2012 would be “another very profitable year.” A Look at the Lending Environment “The capital market, which I believe started obvious signs of recovery in 2011, currently is doing well and continues to strengthen,” says Dean Hirabayashi, senior vice president/ manager, Dean Hirabayashi commercial real estate department, American Savings Bank (ASB). “Today, there are far fewer bank failures, bank profits continue to improve, asset quality issues are under control and other sources of debt, such as CMBS (commercial mortgage-backed securities), life insurance companies and MBS (mortgage-backed securities) have returned to the market. Also, many market indicators are pointing in the same direction, starting with the gradual economic and housing recovery nationally. Locally, there was tourism’s record-breaking 2012 year and favorable outlook over the next couple of years, strengthening housing market conditions, lowered unemployment, signs of job growth, improving construction activity, plus rail is digging in, consumer spending is up and the total population is increasing. There also is the increasing amount of investment capital entering the market seeking the better yields that commercial real estate investments can provide. All are very supportive of the commercial real estate market and give lenders more confidence to make loans. At American Savings Bank,” Hirabayashi says, “we are very fortunate to be in a position to lend new money. We really started pursuing the market in 2010, at the tail end of the great recession. We are diversified in our financing activities for acquisition and development projects, having made loans in all asset classes such as retail, multi-family, office and condo and residential communities. One of our most notable recent projects was the 16 | BUILDING INDUSTRY | APRIL 2013 development of the 176-unit Holomua high-rise condominium building, which should start turning over units to its buyers this month.” “I believe the economic conditions within the Hawaii market have strengthened over the last couple of years,” says Arnold Martines, senior vice president and division manager, commercial real estate lending division, for Central Pacific Arnold Martines Bank (CPB). “You can see evidence of improvement in the modest decline in unemployment levels and the increasing numbers and dollars spent by visitors to Hawaii. We are seeing real estate developers and investors regaining confidence, and in particular, willing to make investments in new residential product development.

Table of Contents for the Digital Edition of Building Industry Magazine - April 2013

FINANCE, BONDING AND INSURANCE
ECONOMIC ENGINES
BUILD WITH ‘GREEN’ WOOD
SUBCONTRACTORS ASSOCIATION OF HAWAII
Greenpath installs ground-mount PV system
Ness Turf opens in Kapolei
Bonterra Solar powers storage company
Coastal Construction completes St. Francis center
And the “Sweepsteaks” winner is …
Editor’s Corner
Datebook
Concept To Completion: Holomua
Contracts Awarded
Low Bids
Spotlight On Success: The Towers at Kuhio Park
Best Practices
New Products

Building Industry Magazine - April 2013