Near the epicenter of the late unpleasantness was that wonder of complex engineering, the CRE CDO. It has been blamed for near everything that went wrong or was wrong in the commercial real estate space. It probably is responsible for the winters of 2010 and 2011. The CRE CDO, as it was initially designed, was … Continue Reading
Although there is renewed optimism for a vibrant CRE lending market in 2011 (or at least a significantly better market than the prior 3 years), many lenders and servicers continue to face challenges in dealing with delinquent or defaulted commercial mortgage and mezzanine loans (whether held on balance-sheet or securitized). The volume of these “scratch … Continue Reading
While perhaps akin to stories of sixteen foot gators in the New York sewer system, I have heard that there is a physiological basis for suppressing the more painful memories of childbirth which is the species’ way of ensuring that couples have more than one child. Perhaps a similar thing is affecting investors and market … Continue Reading
Leading with the good news, the commercial mortgage finance market is back and growing at a brisk pace. From a few standalones in the fourth quarter of 2009, we’ve gotten to a remarkable place. Even during the first half of 2010, while lenders were hesitantly starting to lend, precious few lenders actually had real balance sheet availability for securitization. That changed. … Continue Reading
I’m writing from Pennsylvania Station on a particularly bad day for our national rail service (Amtrak) – apparently the heavy rains and gusts wreaked havoc with electrical wires running both North and South, delaying (or cancelling) every Acela, Keystone, Silver Meteor, Silver Star and Vermonter scheduled to leave our country’s busiest transport hub. The (woefully underrated) … Continue Reading
With Thanksgiving upon us and the holiday season in full swing, we here at CrunchedCredit.com would like to present our “Golden Turkeys”, noting certain special contributions to the ongoing resurrection of the Commercial Real Estate Finance industry. The Golden Turkey for the Best Self-Inflicted Wound: FASB Hands down, this goes to the Financial Accounting Standards … Continue Reading
Last Thursday – an archetypal rainy and windswept late October afternoon in New England (think orange and red leaves underfoot, Finny and Gene walking to class, etc., etc.) – I attended the annual Symposium offered by the Real Estate Council of Boston College . In attendance, perhaps one hundred and fifty lenders, developers, investors, lawyers, brokers, … Continue Reading
Somehow, particularly this year, the fact that election eve and All Hallow’s Eve arrive but three days apart seems so compellingly appropriate. Both are scary and both involve an awful lot of people pretending to be something they’re not. But elections are supposed to have consequences while Halloween does not. So let’s test that. Does … Continue Reading
A recent Boston Magazine piece on Jack Connors (co-founder of Hill Holliday, Boston College alum and heir to the late Ted Kennedy’s position as city patriarch) noted, quite rightly, that the Hub is somewhat unique among major American cities in that no single industry dominates its cultural identity. In New York, Wall Street is (still) … Continue Reading
Why not be optimistic about 2011? Admittedly, those who know me say that if I’m deeply pessimistic it’s time to buy guns, gold and canned food and dig a hole. But why not be optimistic about next year? Let’s tout it up.… Continue Reading
Two weeks ago, As the World Turns – a CBS soap opera documenting the lives of the inhabitants of the fictional town of Oakdale, Illinois – ended a 54 year run on daytime television. A shorter-tenured, but nonetheless compelling, local epic aired this week as Boston Properties announced that it had emerged from a bidding … Continue Reading
Last week, the Supreme Court of the State of New York handed down a decision in the battle between CWCapital, representing the senior mortgage debt as special servicer, and Pershing’s andWinthrop’s joint venture, who recently bought the mezz debt in this transaction at a deep discount. Everyone knows what’s going on here. The mezz debt was bought as a lever to … Continue Reading
Covered bond legislation is once again a hot topic on Capitol Hill. Representative Scott Garrett (R-NJ) co-sponsored the latest iteration of his proposed legislation (United States Covered Bond Act of 2010 or H.R. 5823 (pdf)) along with Representatives Kanjorski (D-NJ) and Bachus (R-AL). The House Financial Services Committee recently voted in favor of reporting H.R. 5823 … Continue Reading
It’s been very difficult to come up with a cohesive theory on what this earnings’ season has meant for the financial sector – and what investors’ reactions could mean for the credit markets. On Wednesday, Morgan Stanley reported earnings of 80 cents a share, crushing analysts estimates and sending its shares up 8% by mid-morning. … Continue Reading
Community banks – long touted as the “next domino to fall” during this late unpleasantness – were expected to be a significant source of distressed assets for savvy investors. However, many are finding the FDIC Structured Loan Sale Program a long and bumpy road for investment. Historically, the FDIC operated to separate the wheat (failed … Continue Reading
Notwithstanding our optimism, it appears that there was not enough support from the Senate side of the reconciliation committee to include the proposed covered bond amendment in the final financial reform bill approved by the reconciliation committee. However, the support received by the House and some members of the Senate committee indicates that covered bond … Continue Reading
Earlier this week, Representative Scott Garrett (R-NJ) introduced an amendment to the proposed financial reform legislation that will establish a regulatory framework for a covered bond market in the United States. The House side of the reconciliation committee quickly passed the measure – the Senate side is now considering it. This development is welcomed news … Continue Reading
The Senate reconvened reconciliation hearings at noon today with a deal brokered yesterday to place the new financial watchdog agency within the auspices of the Federal Reserve, rather than establishing an independent agency. This compromise by Congressional Democrats – which is engendering strong opposition from some important constituencies – could indicate a growing desperation to get … Continue Reading
According to the Boston Globe, the owners of Boston’s signature office building – the John Hancock Tower – have begun marketing a significant stake in the building. Many will remember that the Hancock Tower represented one of the Great Recession’s first large-scale mezzanine foreclosures, falling in late 2008/early 2009 when a joint venture comprised of … Continue Reading
FASB wants to expand Fair Value to other financial assets. That bears repeating: FASB has published an Exposure Draft that would extend the dubious joys of fair value accounting to ALL financial assets. I so wish I was making this up. On May 26, 2010, FASB published this missive. Fair Value seems to hold a … Continue Reading
I write from CREFC’s annual do with my 800 or so best friends. We are trying to party like it’s not 2009, and you know, we’re getting there. The government’s still playing pin the tail on the regulatory donkey, Europe’s a mess, housing and employment are not ready for prime time, and the banking system … Continue Reading
This article was published by Matthew T. Clark and Stewart McQueen. For 150 attendees, Day 1 of the 2010 CREFC Annual Convention ended with dinner hosted by Dechert at Shelly’s Trattoria in Midtown. We thought the turnout was exceptional, and it was great to be able to socialize and dine with so many of our … Continue Reading
This article was published by Matthew T. Clark and Stewart McQueen. The 2010 CREFC Annual Convention has begun in earnest. Day 1 began for many attendees with a meeting of the Securities and Loan Investors Forum. This meeting included a lengthy discussion of the Fair Value Purchase Option and a perceived conflict of interest existing when … Continue Reading
Last Friday I moderated a panel at the 11th Annual IMN Real Estate Opportunity and Private Investment Forum in New York. The two-day event consisted of about 40 separate concurrent panels and drew over 800 industry participants. The topics covered revolved around distressed debt investing – loan workouts, exit strategies, tranche warfare and distressed asset … Continue Reading
