Changing Landscapes

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 their industry. Yesterday, CIBC World Markets US real estate finance head Michael Higgins, above, said the company has never left 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 Davissays 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.”
The real estate crisis put loan servicers under the klieg lights and highlighted the role they play. GEMSA Loan Services' Joe Beggins, Fitch Ratings’ Stephanie Petosa, Prudential Asset Resources’Catherine Rodewald, Amherst Securities’ Darrell Wheeler, MetLife’s Gary Otten, and Wells Fargo’s Jose Becquer say servicers are trying to do more with less and keep troop morale up. Over half of borrowers are struggling. Internally, a lot more risk management units are driving servicers to produce tangible results. Externally, they’re getting more scrutiny from ratings agencies about their financial condition. A servicer’s wish list? Better documentation and more standardization, meaning fewer exotic covenants and triggers buried somewhere within 1,000 pages

Continue reading this story with a free account

Log in or register
Sign up for more articles like this
Subscribe to Bisnow's Chicago Newsletters
Related Stories

California Investor Scoops Up Amazon Warehouse: The Chicago Deal Sheet

How Crystal Lake 'Connects The Dots' To Building Complete Community

Downtown Atlanta Improvement Group Picks Food Bank Chief As Next Leader

Trump's DEI Crackdown Is Creating New Risks For Landlords That Lease To The Government

Brandon Johnson Seeks Second Term Amid Strained CRE Relationship

Prologis Acquires 69 Acres For 1M SF Chicago-Area Industrial Development

Former CBRE Exec Suing Brokerage Giant Over Age Discrimination, Whistleblower Complaint

D.C. Investor Behind The Stacks Swaps CEO For First Time In 25 Years

First LaSalle Street Reimagined Conversion Opens In Chicago's Loop

CBRE IM Buys Net Lease REIT For $1.6B, Plans More Investment

The Difference Between Service And Hospitality That Makes A Flexible Workspace A Success

Beyond The Boom: How Miami's CRE Market Continues To Be Resilient