Commercial Real Estate

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56402406In a world where we buy groceries, book travel, and even date online, it should come as no surprise that online investment is becoming increasingly prevalent. The rapid shift towards an internet-centric world has made crowdfunding the next “big thing” when it comes to raising capital and finding investment opportunities.

What is Crowdfunding?

In the most basic sense, crowdfunding is a means of raising capital by seeking small amounts of money from a large number of individuals. There are hundreds of websites that act as intermediaries between the investors and the businesses and/or individuals, and provide a platform for the exchange of information and funds to happen in a systematic (and hopefully more legitimate) way.
Continue Reading Crowdfunding: The Next Commercial Real Estate Frontier?

Property Assessed Clean Energy (PACE) loans allow property owners to finance clean energy improvements to their properties generally secured by property liens senior to mortgages through tax assessments.  Moody’s recently released a special comment expressing some concerns and not-so-subtle hints that it thinks that lenders and securitizers should take PACE programs seriously.
Continue Reading PACE Yourself

During the past several years, CRE Securitizations were airbrushed off the financial products reviewing podium like a discredited Politburo member. Not here, never ever here; nope, never heard of it. This was a mistake rooted in populous politics and the conflation of the tools of finance with the tool users (okay, with some very unhelpful help from a few admittedly alarming design failures in the tool itself).

But now, eight years on, plenty of political and regulatory water has gone over the dam. As we said in a recent blog, it’s time for a reset and not just in the legal and regulatory arena, but in the market itself. Taking some liberties with recent news from Detroit, this nifty little coupe of a financial tool has had its successful recall, it’s new and improved, the engineering errors of the early models have been fixed and we’ve sorted out that neither the underaged nor the ethically challenged ought to be allowed to take this little guy out for a spin.
Continue Reading CRE Securitization: Rehabilitation Still In Progress

I have been mulling our 2014 Outlook for some time and decided to wait until after the New Year and CREFC to write.  Just in case we got the whole Mayan calendar end of the world story wrong by a year (hey, it was 5000 years old) which would make the whole prediction thing a bit irrelevant, I elected to wait and possibly save me some work.  But we’re still here and settling into 2014.  It’s time. 
Continue Reading 2014 OUTLOOK

This week, over a thousand industry participants made their way through a rain soaked Manhattan for the start of CREFC’s Annual Conference. The low hum of attendees taking conference calls in corners and tapping messages on iphones provided a constant auditory backdrop to the event and aptly conveyed the velocity of the CMBS industry in 2013. The market is back to work.Continue Reading Stormy Skies Greet Sunny Outlook at CREFC 2013

As we have discussed numerous times in this blog (here, here, here and here), the downturn in the commercial real estate market resulted in much litigation as to guarantor liability for non-recourse debt. As a brief refresher, many of the non-recourse loans made during the CMBS boom included an agreement that, in an event of default, the lender would only exercise remedies against the property securing the loan and not against the borrower (or its principals or sponsors), with an exception for certain borrower “bad-acts” (such as misappropriation of rents, fraud, and in certain instances, borrower bankruptcy or insolvency). In the event the borrower perpetuated any of these bad acts, the guarantor agreed to be liable either for the losses incurred by the lender, or for the full amount of the loan, depending on the bad act committed.Continue Reading On Appeal: The Michigan Court of Appeals Overturns It’s Prior Ruling and Affirms the State’s 2012 Legislation, Nonrecourse Mortgage Loan Act, Which Invalidates Recourse Carveout Guaranties Triggered by Borrower Insolvency

I was entertaining myself early this morning by looking over a joint agency report just released entitled “An Analysis of the Impact of the Commercial Real Estate Concentration Guidance”. This report summarizes the performance of bank CRE portfolios following the issuance of interagency guidance in 2006 entitled “Concentrations in Commercial Real Estate Lending, Sound Risk Management Practices”. Everyone will be shocked, shocked to know that through the course of the worst recession in post-war history, banks lost money because of commercial real estate exposure and many smaller and regional banks went casters up. Well, there’s startling news. We taxpayers pay for this sort of thing. Where is the sequester when we really need it?Continue Reading Undue Commercial Real Estate Risks Are Bad: The Mathematical Proof of the Blindingly Obvious

Terrorism insurance has been boring for the past several years. It risks becoming not boring. In the lee of the terrorism attack of 9/11, the Terrorism Risk Insurance Act, or TRIA, was rapidly passed by the Congress and signed by the President. TRIA provided a federal backstop for private terrorism insurance responding to the unwillingness of the private insurance market to provide meaningful terrorism insurance in light of the unpredictability of the risk and, therefore, perceived inability to price the insurance. TRIA was initially passed in November 2002 and reauthorized in 2005 and 2007. It expires on December 31, 2014. An extension is far from certain.Continue Reading Terrorism Insurance Redux

Following a great evening with our clients and friends at the top of the Hay Adams, Conference Co-Chair Rick Jones kicked off Conference Day 2 here at CREFC with a panel on the slow-motion car crash that is the European sovereign crisis. And while the Bank runs,  a 100 billion in land loans, and GrexIt combine to paint a sobering picture for the next few months, we’re all continuing to look for opportunities. Do we go from crisis to calm to crisis? Will Europe begin to federalize? Will investors in CRE eventually get used to the Euro ups and downs and just ignore it? Lots of questions, not many concrete answers.Continue Reading CrunchedCredit.com Live Blog From CREFC 2012 Annual Conference – Day 2

Over 800 industry participants have descended on Washington D.C. for the CREFC annual conference. With CREFC’s expanded focus on more than just securitization, we are now hearing from a more diverse set of voices at the conference. The conference kicked off this morning with the PSA Task Force’s discussion of the pooling and servicing agreement simplification…