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Why is a Multi-HUB Network Essential Right NOW?

The time is right!

THE BENEFITS OF A MULTI-HUB NETWORK ARE NEEDED NOW.

ARTIFICIAL INTELLIGENCE (AI)

AI requires large corporations to invest in technology, programming applications to use AI, data centers, cost of chips, long term budgeting to determine ROI. Even surges in electric power need for AI CHIPS  and applications. Enormous demand will result in surges in cost of AI.

New expertise, talent, and Business processes plus investment to be competitive will require new doors to be opened from inside local markets and outside.

MIGRATION

People and companies moving from out of state. Making decisions. Need to know there is a business community with a talent pool, a qualified employee base, is family friendly, and ability to navigate a friendly government.

FOREIGN INVESTMENT

As international business, economy and government focus of safety, the United States surfaces as a location. But where in the United States.

See Supreme Court Upholds a Tax on Foreign Income | Newsmax.com June 20, 2024

CHAMBERS OF COMMERCE

Chambers and other organizations are organized to create and support opportunities for local business people. These excellent organization are not organized for outreach. Outreach is not typically part of the Chamber's Mission Statement and Bylaws.  

SFBDG's HUBS will seek to create relationships with Chambers and other organizations to create a viable, cooperative platform for these organizations, and will collaboratively co-exist in HUB markets.

Note: Arthur Rosenfield is the former founder and President of a Chamber of Commerce in New York City, and serves as a Director on several Chamber Boards and similar organizations.

WORKFORCE HOUSING

For a number of reasons that related to population growth and economics, there is an affordable housing crisis.  Employers, investors, real estate developers, government agencies, NGO, and communities are seeking solutions to this problem. There are subsidies solutions and commercial solutions.  There are also zoning regulations and other factors that impede solutions. 

This is an important issue to community leaders that want local markets to thrive. Building affordable housing in scale is important to communities that want to attract economic development.  

HUBS can bring the necessary partners together to support this need and reduce risks.

CURRENT STATUS OF BANKS IN UNITED STATES

"More than 60 of the largest banks in the country are at increased risk of failure due to their commercial real estate (CRE) exposures, according to a data analysis from a finance expert at Florida Atlantic University.

Sixty-seven banks have exposure to commercial real estate greater than 300% of their total equity, as reported in their first quarter 2024 regulatory data and shown by the U.S. Banks’ Exposure to Risk from Commercial Real Estate screener.

“This is a very serious development for our banking system as commercial real estate loans are repricing in a high interest-rate environment,” said Rebel Cole, Ph.D., Lynn Eminent Scholar Chaired Professor of Finance in FAU’s College of Business. “With commercial properties selling at serious discounts in the current market, banks eventually are going to be forced by regulators to write down those exposures.”

The U.S. Banks’ Exposure to Risk from Real Estate screener, a part of the Banking Initiative at Florida Atlantic University, measures the risk to exposure from commercial real estate at the 157 largest banks in the country with more than $10 billion in total assets. Using publicly available data released quarterly from the Federal Financial Institutions Examination Council Central Data Repository, Cole calculates each bank’s total CRE exposure as a percentage of the bank’s total equity. Bank regulators view any ratio over 300% as excess exposure to CRE, which puts the bank at greater risk of failure.

The banks of greatest concern are Flagstar Bank and Zion Bancorporation, according to the screener. Flagstar Bank reported $113 billion in assets with a total CRE of $51 billion. The bank, however, only had $9.3 billion in total equity, making its total CRE exposure 553% of its total equity.

Similarly, Zion Bancorp had a total CRE of 440% of its total equity; the bank reported $87 billion in assets and total CRE of $26 billion, but only $5.8 billion in total equity."

“These are the two largest banks with excessive exposure to commercial real estate,” Cole said. “Both rely heavily on uninsured deposits, which makes them vulnerable to a bank run similar to what forced regulators to close three large banks during spring 2023. Those bank closures have led to concerns about the stability of the U.S. banking system that persist to today.”

For comparison, the Q1 2024 industry-average benchmark for total CRE exposure was 139% of total equity.

Banks with less than $10 billion in total assets are facing similar risks due to their commercial real estate exposure. Among banks of any size, 1,871 have total CRE exposures greater than 300%, 1,112 have exposures greater than 400%, 551 have exposures greater than 500% and 243 have exposures greater than 600%.

“Three banks have failed in the past year and now we have several candidates where their exposure to commercial real estate is over 500%. Should another bank fail, it’s likely that depositors will pull their money out of these highly exposed banks, which could lead to a banking panic similar to what we saw during spring 2023,” Cole said.

https://www.fau.edu/newsdesk/articles/commercial-real-estate-screener-banks-failure