Craig Ustler Development

Video Lecture: Craig Ustler
Craig Ustler, UF alumni and owner of Ustler Development, Inc., lecture is about the benefits of urbanism and how take is that the “American Dream” has changed. He believes that people no longer want the “Leave It to Beaver” or “Brady Bunch” lifestyle of living in the suburbs, rather, people now want the type of lifestyle of sitcoms such as Seinfeld, Friends, and Sex in the City, or those showing city life. The market is now demanding commercially, socially, and financially sustainable communities. Communities need to be mulit-purpose and centrally located, prompting people to move away from suburbs and move towards urban planned communities. Urban communities, once considered crime ridden, are now hip and are
Alan Greenspan cut interest rates after the attacks to encourage Americans to spend more. As a result of the reduced interest rates, mortgage rates also were reduced, encouraging many Americans to buy homes. As the number of homes purchased went up, the prices of the home went up. Home prices got so high, many people could not afford to buy them, to fix this California created the sub-prime mortgage. These new mortgages allowed Americans who did not qualify for traditional mortgages, due to insufficient income or poor credit, to be able to buy a home. These sub-prime mortgages were then packaged into Mortgage Backed Securities (MBS) and became a popular commodity on Wall Street. With such a high demand, Wall Street was trying to get lenders to make more home loans, which enticed Fannie Mae and Freddie Mac to become involved in the sub-prime mortgage market. Lenders soon started making no income, no asset mortgages. And with lenders ready and willing to lend more capital, homeowners began tapping into their home equity to go shopping. Wall Street quickly developed a new security, the CDO, to package and sell to their customers around the world. These CDO’s were given inappropriate top ratings by the rating companies, and investors scurried to buy them. Unfortunately, most investors did not understand the CDO and
Carmichael believes the “good” is that the economy is finally starting to stabilize and is actually predicting minor growth in GDP. The “bad” being no job growth in the near future and a double dip recession. He also feels that consumers will not spend their money, rather they will continue to save. Carmichael defines the “ugly” as the demand for CRE is at all-time lows and that job growth will be necessary before we see any sort of recovery. CRE faces major challenges over the next few years and needs to develop a strategy. This can be accomplished by restructuring loans, short sale, note sale or foreclosure. Each strategy has its positives and negatives. Carmichael finishes up by expressing that though the environment for CRE is bad, there are still opportunities to make money, either through brokerage or property management. Carmichael feels that this is a period in which it is a buying opportunity, and people should be