New paths to capital.

The Los Angeles Business Journal's Real Estate Finance Directory provides a preview of the topics that will be discussed at the 1995 Annual Real Estate Finance Conference, being held Tuesday, October 24, 1995 at The Biltmore Hotel in downtown Los Angeles. Also included in this special supplement are a variety of listings that identify current sources of funding for commercial real estate.

The 1995 Annual Real Estate Finance Conference features more than 40 speakers, moderators and panelists focusing on the latest trends in real estate finance. The day-long program is sponsored by UCLA Extension's Real Estate Center and the Real Property Section of the Los Angeles County Bar Association. Additional conference sponsors are the Los Angeles Business Journal, E&Y Kenneth Leventhal Real Estate Group, Sonnenblick-Goldman Company, O'Melveny & Myers and Chicago Title Company.

Major firms represented at the conference include Bank of America, Eastdil Realty, G.E. Capital Service Commercial Real Estate, Goldman Sachs & Company, Nomura Securities International, Prudential Realty Group, Sony Pictures, SunAmerica, Wells Fargo Bank and Westmark Realty Advisors.

Featured speakers include Stan Ross, managing partner of E&Y Kenneth Leventhal Real Estate Group and Robert F. Maguire III, co-managing partner of Maguire Thomas Partners. A diverse group of capital providers will also be making themselves available at a "Meet the Lenders" cocktail and hors d'oeuvre reception at the end of the day. In its second year, the conference is quickly becoming the premier real estate finance conference on the West Coast and it is drawing national interest and attention.

CHANGING TIMES

This year's program - "New Paths to Capital" - is organized to present expert advice on how to get real estate deals financed in today's complex economic environment. Developers have thrown their empires into bankruptcy, lenders have developed extensive REO departments, lawyers have abandoned transactional practices to learn about things like judicial foreclosures and many brokers have become auctioneers. Adapting to change has become necessary for survival in real estate.

The dominance of mammoth financial institutions in real estate finance has been challenged by Wall Street's "financial engineers" and other newcomers. Traditional lending institutions are no longer the only game in town, and new financial engineers and advisors are developing fresh sources of capital. Developers are being forced to learn about new market niches and sources for capital. Gone are the days of fully leveraged deals and gone are the days when developers ignored the risks of personal guarantees because of their limited enforceability (since most all lenders are now ready, willing and able to foreclose judicially and seek deficiency judgments against individual partners and shareholders). Also gone are traditional loan documents that had little or no teeth after the real estate loan was closed. In their place are credit instruments which, among other things, nix the nonrecourse provisions upon the filing of a bankruptcy petition by the borrower.

Fortunately, the real estate market in Southern California appears to be on the rebound. There are once again plans for selective speculative building projects. Demand for industrial space in Orange County is strong, retail space is moving briskly in the San Fernando Valley, and warehouse space in San Bernardino and Riverside counties is at a premium. Capital from places such as China, Korea, Hong Kong and Taiwan is continuing to flow into California. Even the Japanese are again showing signs of interest in the California economy, despite being saddled with many debt-laden "trophy" properties.

Downtown Los Angeles remains overbuilt, the mid-Wilshire area has yet to recover from its malaise, and office vacancies in Ventura are still at 16%. But with many properties being sold for significantly less than replacement value, many investors can expect to earn favorable returns on Southern California investments over the next five years. As a result, financial markets are once again making money available in Southern California and Wall Street is taking an active role with mortgaged-backed securities and other financial instruments.

Keeping up with change takes knowledge and an understanding of new paths to capital; this is the focus of the 1995 Annual Real Estate Finance Conference. More information about the upcoming conference is available by calling UCLA Extension at [phone]. To register by telephone with a credit card, call [phone].

RICK S. KIRKBRIDE, ESQ. IS A PARTNER AT LAW FIRM JEFFER, MANGELS, BUTLER & MARMARO IN CENTURY CITY AND CHAIRMAN OF UCLA'S 1995 ANNUAL REAL ESTATE FINANCE CONFERENCE.