Investors generate energy among lenders
The Aspen Business Journal recently reported that Aspen, Colorado, experienced the best commercial real estate sales in 2012 than it had in at least 10 years, and the trend should continue to provide excitement in the local market in 2013. Because the acquisition of several large business buildings was based on loans, the source noted that last year's activity ensures money will be flowing into the local economy. The stability should provide means for the trend to continue, according to Aspen's Wells Fargo vice president of commercial real estate Gordon Ledingham.
"Aspen is a strong attractive market for investors and it usually holds its value," he said, according to the news source. "Investors are saying that now is a good time to come into Aspen, so they're positioning themselves for the recovery of the economy."
While big business banking organizations have been the key stakeholders in recent Aspen developments, the trends reported by the Business Journal are promising for the community bank industry. Investments in commercial real estate last year, the source noted, allowed lenders to move some focus off of repayment problems and onto fresh ventures.
The activity in Aspen may answer business financial service professionals' questions about how small banks can make profit strides in the banking industry.
Commercial loans could be the answer
Ed Sibbald, director of Georgia Southern University's Center for Excellence in Financial Services, told Savannah Now that he wondered what the best step is for community banks moving forward.
"If you're a banker and you've cleaned up all your problems and you're ready to get on with business, you have to be asking yourself, where are the profits going to come from?" he asked.
By following the lead of bigger banks working with investors like those in Aspen, small organizations may be able to establish themselves as highly profitable businesses once again in Main Street America. Some community banks in Savannah are getting the assets they need to enter the commercial loan market through acquisitions by major corporations, but, according to president of First Chatham Bank Brian Foster, businesses like his are profiting by staying independently run.
"We feel pretty good about being one of the few real local banks any more, and we are getting a good response from people wanting to stay with a local bank," he said in Savannah Now.