In between record snowfall and ice storms here in Philadelphia, a number of Dechert attorneys went down to sunny Orlando Florida for the MBA CREF 2014 Conference.
The conference kicked off with a bang (or a whimper, if you are a Broncos fan) with a blow out of a Super Bowl. The business end of the conference started off in earnest with Jeb Bush attending the opening session and discussing his views on immigration reform and monetary policy. During the Q&A session attendees showed they were more interested in whether he would finally throw his hat into the 2016 Presidential race.
Conference attendees buzzed about many of the trends we saw at the CREFC January 2014 Conference, with all but a few predicting a great year.
On the CMBS side, lenders predicted more volume with more than $100 billion in issuance this year. Lenders were cognizant of decreasing LTV levels and the increasing prevalence of interest only loans. Some attributed these features to a large number of CMBS lenders (both new and old) creating a very competitive environment for new origination. On the positive side, many noted that real estate property values were increasing faster than expected.
Balance sheet lenders were also optimistic about 2014. Two unsurprising trends came out of the balance sheet panel: balance sheet side of banks are not chasing deals (rather they are relying on existing relationships with favored sponsors) and they are hesitant to jump back in to highly structured deals.
As conference season comes to a close we are seeing optimism in all sectors of commercial real estate and we are very excited to execute on the gangbusters year everyone is predicting.