Five Steps to a Safe CMBS Exit Strategy
July 1, 2013 — The commercial mortgage-backed securities market is back, with investment levels not seen since the last market peak. Current yields are strong compared to many investment types, and loans originated in the past three years are showing no signs of delinquency.
Look beyond ‘bricks and sticks’ to fix CRE’s future
March 1, 2013 — As competition to close new commercial real estate deals heats up, so does the pressure to loosen credit standards, lapse into overly-optimistic underwriting and ignore the operational context in which the asset sits. If industry participants are not careful, history could repeat itself in the very process of resolving the fallout from The Great Recession. To be sure, there will be plenty of occasions ahead to apply lessons learned in the deepest trenches of the ‘new normal’. In 2007 alone, loan originations reached $570 billion, helping set the stage for continued focus on the massive amount of loan maturities yet to occur.
CMBS: Feeding the Elephant in the Room
February 9, 2012 — At the height of the U.S. property boom from 2005 to 2007, the allure of Commercial Mortgage-Backed Securities (CMBS) seemed without limit. During that 3-year period, more than 30,000 loans were pooled into $602 billion of new CMBS bonds. Then came the reckoning now recorded as the Great Recession when the CMBS industry collapsed, issuing a paltry $28 billion in three combined years from 2008 to 2010. In 2011, the fragile recovery in commercial real estate included $32.7 billion in CMBS.
Commercial Real Estate: Where’s The Payoff?
February 9, 2012 — Every economic contraction teaches hard lessons, and the Great Recession dealt punishing blows to the commercial real estate sector. Borrowers, lenders and investors bring different pain points and business agendas to the table, but they share a common focus: Will this deal deliver the expected payoff?
Tale of Two Markets
August 16, 2011 — By all indicators, the U.S. economy will continue riding a “recession-recovery roller coaster” into 2012. The banking industry’s woes are well known, and of course, the recovery requires a solvent and competitive banking sector – we all remember TARP. Less publicized is the distinct impact the lending practices of the banking industry have made on the commercial real estate segment, in particular as it relates to investment by institutional players and REITs