Prepared Remarks of MBA President and CEO Bob Broeksmit, CMB, at the 2023 Commercial/Multifamily Finance Convention and Expo

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Adam DeSanctis

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San Diego (February 13, 2023) — 

Bob Broeksmit, CMB, MBA President and CEO, delivered the following remarks at MBA's 2023 Commercial/Multifamily Finance Convention and Expo.

[Please Note: These are prepared remarks. Mr. Broeksmit may add to or subtract from these remarks during the course of his presentation. Portions of the text may be omitted during the speech.]

INTRO 

Good morning! It’s great to be back in San Diego. And it’s even better to see so many of our members. Thank you for being here. 

This time last year, we were the first big convention to come back to this hotel. And this year, we’re going bigger and better. Our commercial and multifamily members deserve it. 

And by the way – when the MBA holds conventions, we aren’t just doing it to see you in person. We’re also doing our best to create as many networking and meeting opportunities as possible to boost your business.  

Just being right here, in this hotel, is good for the commercial bottom line. And make no mistake – that’s our top priority! 

Supporting and strengthening you is why we exist. We feel a special urgency in these uncertain times. 

It’s astounding how dramatically things have changed over the past three years. At the start of the pandemic, we went from a booming economy to a near-unprecedented collapse. COVID has profoundly disrupted where people work and live, and there’s probably no going back.  

It’s nearly impossible to predict what’s coming our way – though stay tuned for our session after this one where MBA’s Mike Fratantoni, Jamie Woodwell, and Reggie Booker will do their best.  

Yet I’m still confident about two things. 

First, you will continue to make a powerful difference in our national life.  

You represent the vast lending universe that we call commercial real estate lending. When Americans head out, they often leave a home you financed, and go to an office, warehouse, store, hospital, or restaurant you financed as well. 

You will envision and deliver the workplace of the future. You will continue to redevelop malls into experiential space and finance last-mile warehouses to accommodate the changing consumer shopping landscape. And at this very moment, you are financing the construction of more rental units than ever before. 

Our multifamily members will give even more people the homes they want at a price they can afford. And across the board, all of you have an impact on America that’s only growing – and I know you’ll lead the way out of these tough times into better days. 

The second thing I’m confident about is that the MBA will continue to help you reach new heights.  

Look no further than the next two days. Our speakers and sessions will give you practical insights, from the market outlook to the evolution of the workplace to construction lending and beyond. And we have top government leaders with us, too.  

That includes FHA Commissioner Julia Gordon and FHFA Director Sandra Thompson. They can not only provide a look into the Administration’s Housing Action Plan but also into the President’s recently announced actions to protect renters. 

But as we all know, the best part of this convention isn’t the speakers. In fact, I think it’s safe to say none of you are here just to listen to me. 

You’re here to catch up with longstanding partners, make new connections, and ultimately make deals – and we’ve carved out plenty of time for you to get down to business. These may be uncertain times, but I’m one hundred percent certain you’ll leave this convention stronger than when you arrived! 

Of course, the deals of today look a little different than yesterday’s. They have to, given everything that’s happened, and all that’s happening still. 

In the past three years, the workplace has transformed. Offices cleared out almost overnight, and the businesses that serve workers saw traffic drop, almost to zero. In the early days, it looked like things might snap back to normal. Instead, we have a new normal, with the hybrid workplace and a smaller in-person workforce.   

Among those of us with Kastle system fobs to get in and out of the office, just over half as many are going in on a typical day as before the pandemic.  But it varies – midweek that number is up to 56 percent.  And midweek in Austin, 77 percent are back.  

No one knows or feels this transformation more than you. Companies are calling you and your clients to renegotiate their terms or downsize their space. Some office buildings are clearing out, and it’s not clear who’s going to fill them. Further, occupancy can vary by region, making the issue a bit more complex to resolve on a national scale. 

For the record, the MBA itself went through this process last year. Our lease was coming up in a couple years, and we had to consider whether to shrink our footprint or even move. But we didn’t. We doubled down, committing long-term to our community by re-upping our lease for the same space, at new market rates. And now we’re reimagining what our office should look like. 

Now, I admit: Not everyone has that option, and when tenants choose to shrink or leave, we have some choices to make. These days, the single most important word in the commercial world is “pivot,” and that’s exactly what you’re doing.  

MBA is committed to helping you pivot quickly and profitably. That’s why we fully support tax credits and incentives for conversion projects. To put it simply, they’re a win-win for everyone involved. They help you come through downturns, and they help downtown areas stay vibrant. Good policy doesn’t get much clearer than that. 

We’re taking this message to policymakers at every level of government, including the White House and Congress. Our nation’s leaders are looking for ways to support the economy, and tax credits are a no-brainer.  

Advocacy is essential in uncertain times, and not just on tax credits. We see opportunities for further progress on life company risk-based capital standards, state and local tax conversion subsidies, “ESG” regulation, and exempting commercial transactions from small-business reporting.  

Our biggest multifamily focus is increasing rental housing supply. It’s what our members, and our society, need.   

Last year, our advocacy led HUD to take meaningful steps to improve processing times, raise its National Loan Committee and Regional Loan Committee limits, extend the allowance for new construction deals to go directly to firm application, and allow new projects to access surplus cash monthly rather than semiannually. 

There is far more work to be done, however, and we’ll continue to work to resolve the other issues with FHA, and strongly advocate for increases to both the large and statutory loan limits.  

For our Agency lenders, we are proud to see FHFA adopt many MBA recommendations, including streamlined housing goals and lending caps, limiting new radon testing, increasing LIHTC caps, and maintaining the focus on affordable rental housing.   

MBA was also engaged with the White House as it created its recently released Tenant Protection plan.  Throughout the numerous meetings we had over six months with the Administration, I repeatedly reinforced two simple facts. 

First, commercial real estate finance does not interact with the renter. While it is always in our best interest to have healthy and satisfied renters, our end customer is the borrower. 

Second, I made clear that rent control is not the answer.  

Ever. 

Believe me, when I say that every time the topic of rent control comes up, we’re on it. Rent control is never a smart call, but it’s especially foolish right now.  

The MBA is building a nationwide coalition of like-minded associations to spread that message. We’re working with realtors, homebuilders, the National Multifamily Housing Council, and the Apartment Association, to name just a few.  

And we’re affecting the rent-control debate at the highest levels of government. 

In the fall, I was at the White House for an important meeting. It was in the Roosevelt Room, just a few steps away from the Oval Office, and a lot of big names were there, including The HUD Secretary, the Director of FHFA, as well as the heads of the National Economic Council and the Domestic Policy Council. We talked at length about housing supply, and at one point, the conversation turned to rent control. 

I listened to the arguments, which we’ve all heard. Then I offered the facts. I said if we want to increase the supply of housing, then we should never pursue rent control. It’s not the solution. It would worsen the problem. And there are better ways – real ways – to get more people into affordable homes. 

And while we have some issues with the Administration’s plan, I am very happy to say that not one action in the release directly affects our lenders or servicers.  And it does not contain a rent control mandate.   

It just goes to show: The MBA makes your voice heard. Even around the Oval Office. 

We have a lot to do in the days ahead, and all our work is focused on helping you thrive for years to come. The MBA board will meet here on Wednesday morning, and one of our primary topics will be commercial and multifamily. We’ll dig into the trends we’re seeing and the support we can offer, in new and renewed ways. Our goal is to help you stay on the cutting edge, where you belong.  

Speaking of the future, this week we are pleased to welcome 12 CREF Student Fellows, who have been engaged with us as they learn about the industry, network with industry leaders, and work on professional and personal development. They are members of groups traditionally underrepresented in the industry, and the fellowships are sponsored by the DUS Peer Group and several MBA commercial/multifamily members. 

In fact, we’re taking unprecedented steps to invest in our industry’s future workforce. To that end, MBA just launched the CREF Education Networking Group. We’re bringing together thought leaders regularly to discuss training and education best practices. This important effort will help us serve as your best platform to train the next generation of your company’s leaders. And if you have learning and development professionals in your shop who want to get involved, we’d love to have them, and there is more information on our website.    

Regardless of the issue or the initiative, I have one big request for you. Please talk to us. Please tell us how we can help. Make the most of our many services – and let us know how we can serve you better.  

That is why, building on the success of the bank senior executive and life company senior executive roundtables, MBA has created four new senior executive roundtables for the non-bank lending, commercial IMB, servicing, and structured products sectors.  

The new roundtables ensure that all commercial and multifamily lenders have a home and voice at MBA. 

And don’t forget our Peer Business Roundtables. They bring together Chief Technology Officers, Financial Officers, Human Resources Leaders, Marketing Leaders, and Leaders in ESG and climate risk from MBA member firms.  

Initiatives like this are often your best chance to talk to us. And I speak for the entire MBA team when I say nothing is better than hearing from you. 

I said at the outset that I’m confident you’ll go from strength to strength, even in these uncertain times. I feel this way because of what I’ve seen you do. But the biggest reason for my confidence is who you are. 

We’re in this for the long haul. If we obsessed over every quarter, with all the ups and downs, we’d go insane… and probably choose another career. By contrast, when we look to the long term, we envision all the people we’ll help, and that vision keeps us going, year after year. 

You’re the ultimate long-term thinkers – and the best long-haul planners I’ve ever met. The actions you take and the deals you make will reverberate for decades. And if the past is prologue, which I’m certain it is, then you will lead us into a brighter and better future.  

Thank you for being here. On behalf of the MBA, it’s a pleasure to represent you, and a privilege to welcome you back to your CREF convention. 

And now it’s my privilege to introduce MBA’s Chairman – Matthew Rocco. 

He is a guy with a formidable mix of smarts, leadership, and heart when it comes to our industry. 

Matt was drawn to our industry as a teenager. He wanted to do well by doing good. And what better way to give back than to help people achieve their dreams. 

Matt is no stranger to difficult times in our industry. He started his career in the aftermath of the S&L crisis and has seen many ups and downs since. 

Most of Matt’s career has been in commercial and particularly multifamily real estate, so he is tuned into your challenges and priorities.  

After a great run of 20 years at Grandbridge Real Estate, Matt was recently named President of Colliers Mortgage. I know Matt will excel at Colliers as he provides great stewardship as MBA’s 2023 chairman. 

He describes himself as a “servant leader.” That is an apt description as Matt works diligently to represent and serve every MBA member. 

Ladies and gentlemen, MBA Chairman Matt Rocco.