Non-Profit Leasing Association

Headlines---

Pictures from the Past---1992---Richard E. Carolan

Classified Ads---Mark Stuart Finds Position

EAEL hangs in there----

Bankruptcy judge OKs auction plans for Conseco Finance

What Lessors Are Saying About. . .Marketing 2003

Alexa Ranks Leasing Association Web Sites

DOT's Mineta returns to hospital

Silicon Valley vacancy rate highest in U.S.

Top Stories of 2002----

Sean Wheeler

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Pictures from the Past---1992---Richard E. Carolan

Richard E. Carolan, Senior Vice President of BOT Financial Corporation, a Boston based subsidiary of The Bank of Tokyo Ltd. Mr. Carolan has worked at BOT Financial and its predecessor company, Banc New England Leasing Group, since 1979, prior to which he worked for the IBM Corporation. He received his B.A. from Georgetown and MBA from Boston College.

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Classified Ads---Mark Stuart Finds Position

I would like to withdraw my posting from the "Post a Job Wanted" section of your web site. Please remove when you have a moment.

You were of help in that I received a number of inquires, talked to a lot of

people, and visited their web sites. The job I decided to go with is with

US Bank as a commercial lending officer. It was a very good offer. One

more thing, I will certainly recommend your site to others if they are

looking for a position.

Mark Stuart

Portland, Oregon

markstu@msn.com

Finance: Atlanta, GA

Twenty five plus years experience in middle market lease/ asset based/cash flow transactions. Heavy banking and credit background, with particular expertise in structure and negotiation. Email:brown235@bellsouth.net

Finance: Lyndhurst, NJ

CFO w/20+ years leasing/financing. Respected by lenders/rating agencies full & fair financial reporting. Outstanding record restructuring debt. Adept at investor relations and mentoring people. Email:joemcdev@aol.com

Finance: Orange County, CA

CFO/Controller/IT Director - 15 years experience in leasing and ABL. Experienced in: Accounting, Finance, Systems, Tax, Operations,Securitizations, etc.MBA, ELA member. Many accomplishments. Email:gosween@cox.net

Legal: Los Angeles, CA

Experienced in-house corporate and financial services attorney seeks position as managing or transactional counsel. Willing to re-locate. email:sandidq@msn.com

Operations: Experienced Credit, Collections, lease and Finance operations. Manager w/ expertise in improving bottom line performance, excellent trainer, manager, motivator. Get result/ keep the customer coming back. Email:rgmorrill@comcast.net

Operations: Wayne, NJ

20+ heavily experienced collection/recovery VP looking to improve someone's bottom line. Proven, verifiable track record. Knowledge of all types of portfolio. Will relocate Email:cmate@nac.net

Receptionist: San Diego, CA.

An outgoing, people loving person. Can handle several tasks at once. 35 wpm, some receptionist exp.in high school office, &some comp.knowledge. email:dvynangel69@msn.com

Sales: Seattle, WA

Sales professional, looking for sales/leasing position to work from home office. Tenacious, aggressive, personable. Strong on the phone. Outstanding PC, cold-calling, and closing skills. Email:bsmith@mybillsmith.com

full list available at: http://65.209.205.32/LeasingNews/JobPostings.htm

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EAEL hangs in there----

At the end of 2002 the Eastern Association of Equipment Lessors

had 216 members.

2000---240

2001---228

2002---216

Eastern Association of Equipment Lessors

600 Mamaroneck Avenue

Harrison, NY 10528

P: 914-381-5830

F: 914-381-5829

Alison Pryor, Executive Director

amfnyc@eael.org

The Eastern Association of Equipment Lessors is a trade association for

entrepreneurial leasing companies, banks, brokers and their services firms.

As of June 30 EAEL had 202 members:

132 Lessor/Broker

29 Funding Sources

18 Service Providers

23 Attorneys

Last June EAEL had 213 members, and the end of the year, 2001: 228 members.

This is not uncommon due the economic times, including mergers,

acquisitions, and failure of many large leasing companies.

EAEL is primarily a regional association with 67% in the Northeast (NY, NJ,

MA, CT), an additional 5% in PA and MD, and the remainder in 25 states and

Puerto Rico.

One important distinction in EAEL membership recruitment is that they do not solicit Brokers/ Lessors west of the Mississippi River.

Members share information, have a close bond, often join other leasing

associations in joint conferences.

There has been talk for years that this association would merge with

another, but there is a closeness among members that would be lost, and as

important, the membership dues overall are the lowest of the other three

leasing organization who would be their suitors.

ELA has not raised their membership dues:

$300.00 FULL MEMBERSHIP (less than 3 employees)

$600.00 FULL MEMBERSHIP (less than 50 Employees)

$800.00 FULL MEMBERSHIP (more than 50 Employees)

$800.00 FULL MEMBERSHIP (funding source)

$800.00 SERVICE MEMBERSHIP (attorneys, accountants, etc.)

Many of their members now belong to other leasing associations, as is common in the industry, especially for funders and those companies with business

across the United States.

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Bankruptcy judge OKs auction plans for Conseco Finance

ASSOCIATED PRESS

INDIANAPOLIS – A bankruptcy judge has approved plans for an auction to sell off Conseco Inc.'s money-losing finance unit, a step that would help the insurance and finance company raise cash to pay creditors owed $6.5 billion.

Meanwhile, a group of creditors who failed to agree with Conseco on its reorganization plans have won formal representation in the Chapter 11 case.

A Chicago-based bankruptcy judge approved auction plans Wednesday for Conseco Finance Corp., the nation's largest mobile-home lender and a provider of other financial products.

The Feb. 28 auction for the St. Paul, Minn.-based unit will come more than two months after its Indiana-based parent became the third- largest company to file for bankruptcy protection. Conseco expects to emerge from Chapter 11 by this spring.

Before its Dec. 17 filing in Chicago, Conseco reached a tentative agreement with a New York investment partnership to buy the finance unit for about $1 billion.

The auction will allow others to submit bids higher than the existing offer from CFN Investment Holdings, a joint venture of Fortress Investment Group and J.C. Flowers & Co.

The partnership has until Feb. 16 to finalize its offer, with other parties' bids due Feb. 24. The auction is to occur four days later, with Judge Carol A. Doyle considering approval of the sale March. 5.

"Our main concern is that we hope Conseco will achieve the maximum recovery from the sale," Irving E. Walker, an attorney representing holders of preferred securities, said Thursday.

Banks and bondholders, who rank above preferred investors in priority for repayment of their investments, agreed last month with Conseco on its reorganization plans. Preferred investors, who are owed $1.9 billion, did not.

They gained formal status in the bankruptcy case last week when a bankruptcy trustee agreed to appoint a three-person committee representing preferred investors. Without such an appointment, many investors could not have afforded their own lawyers and other professionals to represent them, Walker said.

"We now have a fair chance to be heard," he said.

The sale of the finance unit is a key part of Conseco's reorganization. Even if a bidder boosts the unit's sale price above the current $1 billion, Conseco won't come close to recovering the $6 billion it spent to buy Green Tree Financial Corp. – now Conseco Finance Corp. – in 1998.

Conseco, then a fast-growing insurer, hailed the deal as the breakthrough it needed to become a financial-services supermarket to middle America. But the acquisition became by far the biggest source of debt that forced Conseco to seek Chapter 11 protection.

Conseco Finance fell victim to a glut of mobile home loan defaults that grew during the recession.

Conseco, based in the Indianapolis suburb of Carmel, has said its insurance units remain relatively healthy. Those operations are excluded from the assets covered in the bankruptcy filing.

On the Net:

www.conseco.com

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News: Around the Industry

ELA's ELT News is sponsored

What Lessors Are Saying About. . .Marketing 2003

Posted 01/09/03

CFOs have always focused their attention on the bottom line. But in today’s world, scrutiny on deals grows tougher. Even the smallest deals are being placed under a watchful eye. A few lessors agreed to comment on being their deals bug under a microscope, and even gave a little advice on what do about it.

“The bar has been lowered for CFOs to scrutinize even the smallest deals,” said John Handelsman, President of CBI Leasing, Inc., a wholly owned subsidiary of Commerce Bank, N.A., which recently acquired The Vaughn Group. “The dollars scale depending on the size of the company, but the practice exists in most cases.”

“2003 will likely be a year where most businesses have limited top line growth, particularly in the first half of the year,” agreed Jeff Van Cleve, Diebold Credit Corporation. “CFO's, who generally dictate asset financing strategies for their companies, will focus primarily on cash flow improvement and strict expense control to improve profitability and return on total capital.”

The heightened scrutiny seems to be here to stay, as well. In turn, lessors will respond to financial managers’ hard-line on cash flow, profitability, and return on capital, with revamped marketing programs — or should, according to industry experts.

“For lessors this heightened focus presents new challenges,” said Handelsman. “In the past, lessees may have focused on just one cost measurement – PV, implicit rate, or lease payment. Today, they focus on all of them. This means lessors need to change the way they present leasing.”
While most agree that this bottom-line focus is not brand new, there are some aspects of lessors’ marketing that have not necessarily focused on, well, the CFOs focus. Traditional ways of marketing the lease product may not necessarily go the way of the dinosaur, but the tried-and-true “leasing benefit statements” known to be industry standard may take a back seat to a more direct message.

Van Cleve said, “Savvy lessors will focus and educate on how certain lease products provide [bottom-line] advantages, and de-emphasize certain traditional marketing themes, such as convenience, 100% financing, preserve other lines of credit, etc., which are not as important to customers in this environment.”

Not everyone, however, believes this focus is new, either on the CFO’s part or the lessor’s.

“Our positioning has always focused on our customers' overall return on their IT investment, including how leasing helps with cash flow, profitability and return on capital,” said Irv Rothman, HP Financial Services. “If these themes take the spotlight in 2003, we are glad to already be front and center.”

For those needing a little tune-up, however, Handelsman recommends that lessors reevaluate three key areas: the sales process, the risk-reward mix, and what lessors consider “value-adds.”

First, the sales pitch needs to be addressed.

“Your sales people have to be sharper than they used to be – analytical and persuasive,” he said. “They must understand the drivers for customers to lease even on the smallest deals. They also need to ensure the customer is properly calculating costs.”

As scrutiny rises, so does price compression. In light of that, “people have to re-evaluate their product strategy from a risk-reward standpoint to accommodate the price compressions,” said Handelsman. “This may mean you pass on certain deals.”

In addition, as the customer becomes a tougher analyst, lessors will find themselves justifying what they consider “value-added” components of a deal.

“In today’s market the customer wants price and added value,” said Handelsman. “You can’t ask them to pay more because you offer value-add.’ You have to deliver both and be able to articulate what that value is.”

(The laundry list of value-added components to a deal remains elusive, but perhaps will generate yet another ELA e-news exclusive article.)
While clearly, leasing is a harder sale than it used to be (remember 1986?), optimism remains.

“There is always great opportunity,” said VanCleve. “The challenge is to be flexible and adjust to the times. Success will come to those lessors that can effectively seek out new marketing approaches and sales avenues.”

CONTACT:
Amy Miller Holmes
ELA
Phone Number: 703-516-8367
E-mail: aholmes@elamail.com

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Alexa Ranks Leasing Association Web Sites

01/08/03 12/09/2002 WEBSITE NAME

59,689 61,021 www.aba.com American Bankers Association

72,640 66,206 www.monitordaily.com Monitor Daily

78,388 95,739 www.leasingnews.org Leasing News

104,374 116,970 www.elaonline.com Equipment Leasing Association

132,950 126,411 www.nacha.org The Electronic Payments Association

304,657 285,201 www.us-banker.com U.S. Banker

307,547 586,221 www.leasingtoday.com Leasing Today

315,834 269,781 www.cfa.com Commercial Finance Association

326,065 432,923 www.executivecaliber.ws Exec. Caliber-Jeffrey Taylor

334,195 350,430 www.uael.org United Assoc Equipment Leasing

383,001 378,221 www.naelb.org Nat’l Assoc. Equip. Leasing Brokers

548,271 830,226 www.leasefoundation.org Equip Lease & Fin Found.

695,290 586,221 www.clpfoundation.org CLP Foundation

751,146 780,576 www.pblaw.com/newsletters/bln/ Bus. Leasing News

778,573 842,274 www.eael.org Eastern Assoc. of Equipment Leasing

838,591 871,787 www.ibaa.org Ind. Comm. Bankers of America

1,256,726 1,197,705 www.nvla.org National Vehicle Leasing Association

1,781,592 1,025,866 www.iicl.org Inst.of International Container Lessors

3,324,980 3,206,908 www.mael.org Mid-America Assoc. of Equip. Lessors

3,687,589 3,680,586 www.leaselawyer.com Lease Lawyer

NO DATA NO DATA www.nationalfunding.org National Funding Assoc.

3,743,401 3,740,334 www.aglf.org Assoc. of Gov. Leasing and Financing

3,934,172 3,932,424 www.elessors.com eLessors Networking Association

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DOT's Mineta returns to hospital

Transportation Secretary Norman Y. Mineta returned to Walter Reed Army Medical Centers Jan. 7 for treatment of back pain, a day after he left the facility to attend a Cabinet meeting.

Mineta has been holding meetings and telecommuting from his hospital bed, according to a DOT statement.

In August 2002, Mineta underwent a surgical procedure at Walter Reed intended to relieve persistent back pain. Following a trip to visit Coast Guard members at Guantanamo Bay, Cuba, over Thanksgiving, the pain reappeared and the secretary returned to the hospital.

Further tests revealed a staph infection had developed. Scoliosis, a curvature of the spine, is also contributing to his discomfort. The infection has been gradually responding to antibiotics, DOT said. Once the infection is treated, he will undergo a surgical procedure to counteract the scoliosis.

Mineta's prognosis is very good and he expects to resume office duties late next month, DOT said.

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Silicon Valley vacancy rate highest in U.S.

Nearly 30% of offices in South Bay are empty

Kelly Zito,San Francisco Chronicle Staff Writer

Buffeted by the ailing high-tech sector, commercial

vacancy rates in parts of Silicon Valley soared in the latter part of 2002 to nearly 30 percent, the highest in the nation.

The glut of office space was not limited to the epicenter of the dot-com boom-and-bust days. Vacancy rates in portions of the Peninsula, San Francisco and Oakland also jumped in the fourth quarter, in some cases above 26 percent, according to Cushman & Wakefield, a New York commercial real estate firm. Rents have dropped significantly.

"The business market, particularly spending on telecommunication and information technology, has been depressed and the vacancy rates continue to show that," said Tom Lieser, an economist at UCLA.

Commercial vacancy rates are closely watched because they frequently shadow employment figures and therefore signal the direction of the economy. And empty commercial buildings have their own ripple effects; fewer filled cubicles mean a smaller market for dry cleaners, drugstores and restaurateurs.

"A lot of small businesses out there are hurting," said Joe Cook, Cushman & Wakefield's senior managing director for Northern California. "You certainly hear about a lot of restaurants only offering dinner because there's no lunch market anymore."

The commercial vacancy rate in the suburban portion of Silicon Valley, about 33 million square feet comprising about 85 percent of the region's office market, was 28.7 percent in the fourth quarter of 2002, according to a recent Cushman & Wakefield study. That is a 44.9 percent jump from the 19.8 percent vacancy rate for the fourth quarter of 2001. In downtown San Jose, the vacancy rate almost doubled, from 9.8 percent to 19.1 percent.

The commercial category includes about 39 million square feet in Silicon Valley. It does not include the 146.7 million-square-foot industrial market, buildings used for manufacturing and warehousing, where the vacancy rate ballooned from 11.2 percent in the fourth quarter of 2001 to 17.6 percent.

The picture was similar in San Francisco and Oakland.

The rate of vacancies in downtown San Francisco -- the Financial District and part of the South of Market area -- rose to 19.7 percent from 15.9 percent year- over-year. In the remainder of the city, office vacancies climbed to 25.3 percent from 23 percent. Citywide, the office vacancy rate was a record 21.7 percent.

In downtown Oakland, the fourth-quarter vacancy rate increased to 20.4 percent from 13.3 percent; in the rest of the Oakland area, the business corridor along Highway 880 from Richmond to Union City, vacancies surged to 23. 1 percent from 15.6 percent. On the Peninsula, vacancies jumped to 26.4 percent in the last quarter of 2002 from 21 percent in the last quarter of 2001.

The U.S. downtown vacancy rate rose in the fourth quarter to 14.8 percent, its highest level since 1996. San Jose's suburban market had the highest vacancy rate in the nation, followed by downtown Dallas at 28.2 percent and downtown New Haven, Conn., at 26.6 percent.

Demand for office space in the Bay Area began to ebb in the spring of 2001 after the tech-heavy Nasdaq tumbled and Web shops and computer software and hardware firms started reining in expansion plans or shutting their doors altogether. The sector took another hit after the Sept. 11 terrorist attacks and sagged further last year amid rising unemployment -- a whopping 7.8 percent in Santa Clara County in November -- and a gyrating stock market.

Take Agile Software of San Jose. This spring, the company, which makes programs that track product design and manufacturing, jettisoned 15 percent of its workforce amid sluggish demand for its products. Since then, Agile scaled back its offices on Almaden Boulevard in San Jose and is planning to sublease about 26,000 feet of the space.

Such consolidations have resulted in a wholesale reduction of rents, particularly in the valley. Asking prices for Class A buildings, usually the highest quality properties, plummeted 38.8 percent from $3.50 per square foot a month to $2.52, according to Cushman & Wakefield.

Asking prices for downtown office buildings in San Francisco fell about 3 percent in the fourth quarter to $30.48 per square foot per year.

On the plus side, nonprofits have benefited from new low rental rates. The San Jose State University Foundation recently signed a lease for 24,000 square feet in downtown San Jose. Suzanne Murphy, the foundation's director of client financial services, said shopping for the space was a dream compared with two years ago when landlords demanded not only exorbitant rents but stock options and up-front cash payments.

"Three years ago, landlords were throwing not-for- profits out on the streets for the sock puppet," she said, referring to the popular mascot for the now- defunct Pets.com. "Now, it's more of a tenants' market."

Mark Ritchie, president of Ritchie Commercial in San Jose, expects commercial rent prices to slow their free-fall, dipping only another 5 to 7 percent this year, in part because fewer large scale office buildings are expected to come online.

But few believe the Bay Area commercial market will turn around until at least 2004.

Jack Troedson, executive vice president at Cornish & Carey, a commercial real estate firm in Santa Clara, said his firm had "positive net absorption" of 450,000 square feet of office space in buildings from Redwood City to Mountain View in the fourth quarter. That is, the total number of square feet leased outstripped the number of square feet vacated by 450,000.

Still, Troedson said there are vast amounts of so- called shadow space, or underutilized space, that may delay any turnaround.

On a broader note, UCLA's Lieser wonders whether occupancy rates in Silicon Valley will ever regain their lofty, pre-bust heights.

"Employers are getting very cost-conscious, and they're trying to save every penny they can. We may find that the existing supply of vacant office space (in Silicon Valley) could last a long time," he said.

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