CREFC Introduces New Forums
December 12, 2022.
This week CREFC announced changes to its industry sector forums:
- A new High Yield Investments/Alternative Lending Forum will serve debt funds and others that comprise private lenders and investors in commercial real estate debt (whole loans, mezzanine loans, preferred equity, and sub-performing/non-performing loans).
- An expanded Servicers Forum will more fully incorporate CREFC members focused on special assets and special situations.
The changes reformulate the existing High Yield and Distressed Reality Assets (HYDRA) Forum and reflect the evolution of this sector of the CRE finance market. More information on the new forums is below.
CREFC Member Action Required: Current CREFC members of both the HYDRA and Servicers Forums will receive an email request to make new forum selections based on their role in the industry and the descriptions of the forums as presented above.
Alternative Lenders and High Yield Investors Forum
The Alternative Lenders and High Yield Investors Forum will focus on the needs of this growing and important source of market liquidity. Alternative lenders now represent 15% to 20% of annual CRE lending activity.
Membership in this forum will include Alternative lenders and High yield investors in the CRE debt and equity space:*
- Lenders and investors include debt funds, public/private mortgage REITs, money managers, separately managed accounts (SMAs), and other public or private entities.
- Investments include bridge and mezzanine loans, preferred equity, and special/distressed situation opportunities.
- Third-party service providers and business partners who work closely with such lenders and investors.
Importantly, this forum will be instrumental in the development and ongoing maintenance of the soon to be launched CREFC/NCREIF Open-End Debt Fund Index, with the goal of increasing transparency and liquidity in this important sector of the market.
The forum will also:
- Afford this CREFC member segment a clear, formal voice in CREFC
- Provide members with a stronger voice with regulators and legislators on Capitol Hill.
Updated Servicers Forum
The HYDRA transformation will shift the Distressed Realty Assets (DRA) portion of HYDRA to the Servicers Forum. CREFC is realigning the Servicers Forum to include two main focus areas:
- Servicing Administration
- Special Situations/Special Assets
The newly cast Servicers Forum will represent market participants with separate leadership teams in the servicing of performing asset and non-performing/distressed assets, and include primary servicers and the GSEs.
The combined and expanded Forum will create a collaborative environment to focus on all servicing and trust administration issues within a single forum, while recognizing the diverse issues associated with servicing performing and non-performing loans.
Note that both the current leadership within the Servicers Forum and the Distressed Realty Assets sub-forum of HYDRA will remain in place.
Go deeper: Over the years, content for the existing HYDRA Forum has become divergent into near separate discussions that relate to either alternative lending/investing or distressed asset management and special servicing. This divergence has made it challenging to optimally serve the varying needs of existing HYDRA members. The revised forums aim to better align these conversations.
* Does not include (is not intended to replace) lenders/investors that are served by the Investment-Grade Bondholders, B-Piece Investors, Portfolio Lenders-Bank, Portfolio Lenders-Insurance Company, or Issuer forums