The new Opportunity Zones program that came to us in 2017’s major tax reform offers investors the chance to roll the capital gains from the sale of any appreciated property into new investments, located within specially designated areas known as Opportunity Zones, and defer—and potentially partially eliminate— capital gains taxes on such sale. The program … Continue Reading
It’s 2019. Nothing really terrible or shocking has happened yet…at least by the standards of December. But it’s early yet. As a card-carrying member of the commentariat, I could not possibly pass up the opportunity to bloviate on the “Year Ahead” with the certain knowledge that no one will remember if I’m wrong, and if … Continue Reading
LIBOR is going away, but that’s sort of old news at this point. However, it has been received wisdom that only after the Bank of England stops imposing an obligation upon member banks to publish LIBOR quotes as at the beginning of 2021, would LIBOR go away and then we would need a replacement. … Continue Reading
When House Speaker Paul Ryan announced earlier this month that the House would vote on S.2155, I wasn’t holding my breath (you know you’re on your last lame duck leg when a “senior GOP lawmaker” says you’ve “run out of juice”). Miracles do happen AND sometimes I love to be wrong (but – shh…don’t tell … Continue Reading
Morningstar has published a proposed method for rating single-asset/single-borrower (SASB) transactions. The new approach is slated to replace the “U.S. CMBS Subordination Model” with respect to SASBs and other forms of CMBS securities with similar credit and diversity profiles, including large-loan transactions and rake certificates. Morningstar has issued a request for comments on the proposal. … Continue Reading
It’s day 2 of Mark Zuckerberg’s Congressional debut and I still have yet to catch a glimpse of him or his entourage. But – I have had the opportunity, with some fellow industry players, CREFC staff and members of the CREFC-HVCRE Working Group, to meet and speak with members of the House Financial Services Committee (Andy … Continue Reading
Will 2018 be the Year of Concentration across our market? “The Urge to Merge” was the title of a January 2, 2007 Economist article. It resonates today. The cover photo was two camels copulating, which some of the Economist readers, surely a high-brow and sensitive bunch, apparently found offensive, as the picture is nowhere to … Continue Reading
In case you’ve been too busy sifting through fake news to follow efforts to reform the High Volatility Commercial Real Estate (HVCRE) regulations that affect acquisition, development or construction (ADC) loans, here’s where we are and where we think we are going.… Continue Reading
Fresh off the Philadelphia Eagles’ first Super Bowl victory, a group of Dechert attorneys and 3,500 of our industry colleagues descended on San Diego for the Mortgage Bankers Association (MBA) CREF/Multifamily Housing Convention & Expo. While those of us on the cross-country flight from Philadelphia were in a particularly jubilant mood, it was clear from … Continue Reading
Our friend, Dan Rubock, just inked an interesting and timely piece entitled, “Key pillars of loan structural quality are eroding, especially in single-borrower deals.” As usual, Dan’s views at Moody’s are worth considerable attention. That piece focused on bad-boy carve-out guaranties, the quality of borrower financial information, property release provisions, qualified transfer provisions and cash … Continue Reading
South Beach played host to the 2018 CREFC January Conference last week, as roughly 1,800 of our best friends in the CRE lending and securitization industry assembled in Miami to reflect on another year gone by and to muse about what’s in store (or out of store, in the case of retail) for 2018. In … Continue Reading
Around this time of year, we slip on the prognostication goggles and take a look forward into the next year. While there is ample evidence that prognostication is a dodgy exercise, I always tell my folks that the fact that it’s hard to do and extraordinarily unreliable is not an excuse not to have a … Continue Reading
Did you know that the District of Columbia has assigned officers to enforce its police-your-dog laws? The Poop Police. How low do you have to go, how badly do you have to screw up to be assigned in the District of Columbia to the Poop Police? Do they go under cover? Do they pack heat? … Continue Reading
As we look back each November to bestow the year’s crop of Golden Turkeys to the silliest and most annoying instances of regulatory overreach, legislative inanity, governmental misfeasance or the mere idiotic behavior of people without any help from the government apparatchiki, there’s always a glorious excess of candidates. This whole commentary thing would be … Continue Reading
Add HVCRE reform to the list of things that have bi-partisan support (currently on the list: flag pins and banning the use of Twitter in the White House). On Tuesday, the House passed (with bi-partisan support…which should bolster its chances of passing in the Senate) H.R.2148 – Clarifying Commercial Real Estate Loans, otherwise known as … Continue Reading
At long last (at least for those of us who have been checking the Federal Register daily), the proposed HVADC rule has been published in the Federal Register and is open for comment. The public (that’s us!) has 60 days to comment – so all comments are due by December 26, 2017 (Ho ho ho!). … Continue Reading
On September 27, 2017, the Federal Reserve, FDIC and OCC released a Notice of Proposed Rulemaking (NPR) that they describe as simplifying compliance with certain aspects of the agencies’ risk based capital (RBC) rules to, among other things, replace the standardized approach’s (SA) treatment of HVCRE loans with a simpler treatment for most acquisition, development … Continue Reading
In this commentary we have talked about a lot of challenges facing commercial real estate finance and other capital market activities over the years. With more or less “pants on fire” anxiety, we’ve talked about Dodd-Frank’s regulatory compliance burdens, the Volcker Rule, Risk Retention, the glorious and multitudinous products of the gnomes of Basil, the … Continue Reading
The Wall Street Journal reminded us this month that it was ten years ago, August 9, 2007, that the first regulatory domino in The Great Recession fell as BNP Paribas froze a series of resi investment funds for lack of a functioning market to value the securities. One could quibble about whether The Great Recession could … Continue Reading
Here’s a headline for you: We don’t know if a conventional CMBS securitization where risk retention bonds are retained by a B-buyer under an industry standard third party purchaser agreement achieves accounting sale treatment. Failure of accounting sale treatment means the selling bank cannot book the gain and does not derecognize the underlying loans resulting … Continue Reading
A standalone securitization of a portfolio of properties closed in June. To our knowledge, this was the first transaction in recent memory done in a direct issuance format. In this case, direct issuance means that the sponsor organized the lender and the depositor as well as a borrower and crafted the loan between the lender and … Continue Reading
What in the world have we done to ourselves? Our CRE Securitization business, or at least the conduit part of our business, continues to shrink: $800 billion in outstanding principal balance in 2007 and now, $400 billion? Maybe, right now, we’re at a run rate of $50 billion per year. Is that enough? Does that … Continue Reading
The Trump administration and Congress have lots on the agenda: tax reform, financial regulation reform, job creation (think infrastructure spending, maybe?) and more. While it seems unlikely that much of anything “real” is going to happen anytime soon or even this year (other than more drama, more tweets and more Trump-isms), there’s some hope for … Continue Reading
Since 2015, we here at Crunched Credit have tracked, followed and discussed the developments (or lack thereof) concerning the Immigration Investor Program, more commonly known as the “EB-5 Visa Program.” Throughout the past year, we’ve witnessed the approval of several extensions of the EB-5 Visa Program and in each instance, no substantive changes were included—these … Continue Reading
