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It seems fitting that Marriott’s upcoming acquisition of Starwood Hotels & Resorts (creating one of the largest hotel companies in the world) is anticipated to occur during the prime summer vacation season.  The combined company will be comprised of more than 5,500 hotels and 30 brands.  By way of comparison, Hilton is comprised of over 4,600 hotels and 13 brands and International Hotels Group is comprised of over 5,000 hotels and 10 brands.
Continue Reading Coming to a Hotel Near You: The Starwood-Marriott Merger

The slow start to 2016 did not dampen the enthusiasm at CREFC’s Annual Conference, held last week in New York City.  The conference saw record attendance, with standing-room-only crowds at virtually every panel.  As with the Industry Leaders Conference in January, the hot topics on people’s minds were risk retention (and the rest of the regulatory headwinds), liquidity and the competitiveness of the CMBS market.

The conference made very clear that we are at an inflection point in the current cycle.  The general mood of the conference, in our view, was the confluence of nervousness and cautious optimism.  The gloominess of the first quarter, and fears over the “sky is falling,” has yielded to mild bouts of enthusiasm (at least if the parties were any indication).  The capital markets have settled down over the past few months, spreads have tightened, and borrowers have begun to trickle back into the CMBS market.

Clearly our industry faces headwinds, and nobody is betting on a record second half, but we also did not hear anyone ringing the death knell for our business.  We left the conference with more questions than answers.  Here are some:Continue Reading CREFC Annual Conference 2016: Headwinds or Head First Into the Wall?

On June 6, 2016, the Rapporteur of the European Parliament released a draft legislative resolution to modify EU Risk Retention.  The stated goal of this draft is to promote “Simple, Transparent and Standardized” (STS) securitization.  Since STS securitization assets must be fully self-liquidating, commercial real estate (CRE) is again left out in this proposal; not…

Earlier this month CREFC held its “Commercial Real Estate Finance Summit – West” in Santa Monica, CA, which – while not nearly as large as the annual conference in New York – was still very well attended (roughly 175 attendees, an increase over last year).

Given the sentiment earlier this year in Miami, the fluctuation in spreads over the past couple quarters, and the (now undeniably) slow start to 2016 for many in the industry, the two topics du jour for the Summit should come as no surprise: risk retention and the state of the market.
Continue Reading CREFC Commercial Real Estate Finance Summit (West) 2016

More than two years after the first single-family rental securitization, the single-family rental market continues to evolve and grow. The rise of single-family rentals reflects both a demographic shift among the American population and a reactionary change in consumer habits resulting from the financial crises. According to U.S. Census Bureau, the percentage of Americans that own homes has decreased from almost 70% in 2004, to 63.6% in the first quarter of 2016, the lowest percentage in over 25 years. Over 13% of Americans rent single-family homes – a 4% increase from before the crises, accounting for approximately 36% of all rental homes. The decline in homeownership and the increase in the percentage of Americans that rent single-family homes reflects several key demographic and economic changes:
Continue Reading A Contrarian View on the Single-Family Rental Market

You know, there’s never a dull moment when one reports on the regulatory states’ endless and so often fruitless and wrong-headed tinkering with the global economy. So now… let’s talk bail-in. The bail-in regime, which was adopted by all European Union countries (other than Poland) and implemented on January 1, 2016 (European Economic Area (EEA) members Norway, Iceland and Lichtenstein are required to adopt the regime by December 31, 2016), permits European financial regulators to “bail-in” a failing institution by cancelling, writing-down, or converting into equity certain of the institution’s unsecured liabilities. Affected institutions must include a contractual recognition clause in its non-European-law governed contracts, so that all counterparties acknowledge that the institution’s liabilities are potentially subject to bail-in and agree to be bound by them.
Continue Reading Bail-In, or Just Bailing?

Financial downtrend chart and red pencil. Selective focus

The Federal Reserve announced last Wednesday that it is leaving the federal funds rate where it is, for now.  While the United States is pondering interest rate hikes, other parts of the world are plunging further into negative territory.  Last Thursday, in an attempt to bolster Europe’s weakening growth and spur inflation, the European Central Bank (the “ECB”) lowered its deposit rate by another 0.1%, pushing its deposit rate down to -0.4%.

With other central banks lowering rates into the negative, will the U.S. follow? Why is this happening? What could go wrong? How will this affect our banks?  Click through for three things you should know about negative interest rates.Continue Reading Three Things You Should Know about Negative Interest Rates

Dechert’s Antitrust Merger Investigation Timing Tracker (DAMITT) is at it again compiling data from 2015.

Fast Facts

  • DAMITT- Vuture graphics - 01-16-02Merger investigations in 2015 took an average of
    9.6 months to conduct (more than 1/3 longer than the average from 2011-2013)
  • Federal enforcement activity resulted in 37 significant merger investigations (7 generated complaints seeking to block proposed deals and 24 were resolved by consent orders)
  • Each of these figures was a record for the 5 years in which DAMITT has been tracking antitrust merger investigations

Continue Reading DAMITT – How Long Does it Take to Conduct U.S. Antitrust Merger Investigations? (Update)