News this Week in Commercial Real Estate
Royal Bank of Scotland’s new-issue, multi-borrower CMBS deal, now being scaled back to $309.7 Million, is being marketed and, according to Commercial Mortgage Alert, will not have a B-Piece. CRE Finance Council President Patrick Sargent, who spoke with GlobeSt.com following the news, said he believes deals of this kind may be a harbinger for good things to come, adding that the lower-risk nature of new-issue CMBS deals is increasing investor comfort. “There’s a lot of money out there waiting,” he said.

While noting that losses from commercial real estate will continue to be a problem for the broader economy and particularly for smaller banks, Timothy Geithner did tell CNBC that the looming commercial real estate issue “can be managed.” The U.S. Treasury Secretary was responding to an earlier comment by Congressional Oversight Panel’s Elizabeth Warren who said, by her estimation, fifty percent of all commercial real estate loans will be underwater by the end of this year, with dangerous concentrations within midsize banks.

Meanwhile, with the White House indicating financial reform should be passed by the Senate by the end of May and early momentum for the bill gaining steam, Tennessee Republican Senator Bob Corker has now told the Wall Street Journal that he “absolutely” cannot support the legislation as it currently stands.

Federal Reserve Governor Elizabeth Duke said commercial real estate has hit a “rocky bottom,” adding the Fed generally believes issues with commercial real estate lie in economic fundamentals rather than overbuilding. She made her comments during Q&A at a banker conference in Arizona.

Borrowers of the Federal Reserve’s Legacy TALF program, which closed this past week, tapped the U.S. central bank for about $12 billion in reduced-cost loans to finance purchases of CMBS since July 2009, the first month of the legacy program. The Fed approved 91% of legacy-loan applications and is generally credited for tightening spreads and restoring some confidence among buysiders.

SEC to Consider Revisions to Regulation AB
Today the Securities and Exchange Commission released a notice for an Open Meeting to be held April 7 to consider proposed revisions to Regulation AB and other rules related to the offering process, disclosure and reporting for asset-backed securities. Specifically, the proposed amendments would revise the shelf-offering process and eligibility criteria for ABS and require asset-backed issuers to provide enhanced disclosures, including information regarding each asset in the underlying pool in a standardized, tagged format.

The SEC will also consider revisions to Securities Act Rule 144A and other rules for privately-placed ABS. CRE Finance Council, then CMSA, was actively involved in deliberations with the SEC when the initial rules were first proposed, and we have continued to educate market participants since implementation on Dec. 31, 2005. CRE Finance Council will again actively engage in these efforts to ensure that the specific views of the commercial real estate finance markets are represented. 

April’s U.S. After-Work Seminar to Focus on SEC Disclosure Requirements
CRE Finance Council’s April 27 After-Work Seminar will discuss the effect new SEC/Rating Agency Reform Requirements have on structured finance issuers and originators. Hosted by Cadwalader, Wickersham & Taft in their Lower Manhattan offices, the Seminar runs from 5:30 to 7:00pm with a one-hour reception to follow. An audio recording and slides will be available on CRE Finance Council’s website soon after the event’s conclusion. All CRE Finance Council Seminars also have sold-out this year, so please register as soon as possible to secure a seat.

CRE Finance Council Releases Preliminary Agenda for June Convention
A preliminary program of events for CRE Finance Council’s June Convention 2010 is now available. The agenda will be updated regularly, reflecting CRE Finance Council’s goal of providing a well-rounded program that includes discussions on current market realities and what commercial real estate participants can hope to accomplish in the industry going forward.

Additionally, CRE Finance Council is actively receiving questions about our key sponsorships and some are still available. As CRE Finance Council plans to implement its broad new mandate and strategic plan, sponsorship enables you to gain significant visibility for your company and also allows us to continue to expand our work on behalf of the industry. We encourage all participants – whether they’re current Members, new Forum groups, or other market participants, to register for our June Convention and view the just-released preliminary program.

CRE Finance Council’s Weekly Briefing is a publication for Members and other market participants. Please direct all editorial questions to CRE Finance Council’s Ken Reed. For delivery or email-transmission issues, please contact us with “Weekly Briefing” in the email subject line.

Calendar of Events