Survive the real estate lull by doing what you do best while applying common sense
By Steven D. Hayworth
I moved to Miami in 1980, just as the real estate crisis of the early-1980s was about to reach a tipping point. For those of you who want to remember those days, you will agree it was a challenging environment, to say the least. My own first-home mortgage carried an interest rate of 14.5 percent, and I had to buy fast because developers were raising prices weekly. I had high expectations for my future as a banker, despite South Florida’s numerous challenges at the time. Being naïve and scared were both helpful, but staying focused on what I knew and did best kept me afloat.
Today, I look back on that experience and those in between with great appreciation. When I opened Gibraltar Private Bank & Trust in 1994, staying focused was the mantra that our small team lived by. My 250 colleagues and I continue to build our $1.5 billion business, and it is as apropos as ever.
It is no secret that many local and national residential lenders are currently experiencing significant increases in problem loans and foreclosures. Our consistent conservative and strategic lending practices, based on what we do and for whom, have allowed us to steer clear of the challenges affecting other lenders. Fortunately, the business model we use has not necessitated our offering option ARMs or other high-risk loan products. We also strategically steered clear of speculative condominium construction lending because it was not germane or a core competency of our company.
We did benefit materially from the South Florida housing boom in our own way. The construction boom of the luxury single-family home market played into our hands as we focused on building deep relationships with a handful of experienced custom home builders in our target markets. In addition to our South Florida mortgage banking competency, we have been able to meet the mortgage needs of our clients as they have purchased homes in second home markets such as North Carolina, New York and Colorado.
It may sound a bit simplistic, but when asked for advice on how best to do business in this latest real estate slow-down, I would offer that you must stay focused on what you do best, get all the facts and then apply common sense. This is not a complicated business, but you must be thoughtful and deliberate after you have the requisite information to make an informed decision.
I remain bullish for the long-term viability of Gibraltar Private’s core residential lending competency: providing highly customized, jumbo mortgages and construction loans for luxury, high-end properties. As South Florida continues to evolve, we will also continue to focus on meeting the needs of first-time home buyers by providing mortgage solutions that will ensure that responsible borrowers can enjoy the benefits of home ownership. By following our passion for helping successful professionals, entrepreneurs, affluent retirees and others manage and use their wealth productively, we believe we are uniquely positioned to prosper in all economic cycles.
Steven D. Hayworth is the founder, chairman and CEo of Gibraltar Private Bank & Trust, a South Florida-based financial institution offering full private banking services, wealth management solutions, and a broad range of commercial and residential lending options.