CHANGING LANDSCAPES

February 10, 2011 | 7:00 am ET Staff Reporter

It took seven days to create the world, so coming out of a recession, it's fair that the Mortgage Bankers Association required a second day in San Diego to hash over its industry.

Yesterday, CIBC World Markets US real estate finance head Michael Higgins, above, said the company has never gotten out of the business, "this downturn or the last downturn." CIBC has a good appetite for new lending—it's hoping to make larger loans ($50M to $300M) for its balance sheet, and "we're back fully in the CMBS business." Allstate Investments' Sam Davis says the market is "absolutely in a recovery," but capital is ahead of fundamentals. That's not a bad thing "unless it gets too crazy too soon." But it's a tale of two cities: There's fundamental improvement in certain markets but not others, and uncertainty is still high. Allstate's trying to stick to the country's 30 or 40 largest metros.

Here's the primary lending panel. According to Meridian Capital Group's Marty Lanigan, debt is following equity, and equity is starting with the most diversified, healthiest economies. Guggenheim Partners' Robert Brennan says investors are looking for liquidity, but there's still a mismatch between what the capital is looking for and debt and equity opportunities—and even the bond space. The market is following a classic recovery—money flows to the best assets, the best borrowers, and the best part of the capital stack first. Robert warns that Europe?s not in the clear and that the regulatory environment is a wild card. ?If interest rates go up, it's game over.?

CHANGING LANDSCAPES

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