CREFC Introduces New Forums: CREFC Recasts HYDRA Forum to More Accurately Reflect Market Shifts and Developments
December 6, 2022.
Seeking ways to best serve our over 18,000+ members, CREFC has been hard at work to position its forums to serve the growing needs of its membership. This includes addressing the significant growth in alternative lending platforms, particularly debt funds. These funds comprise lenders and investors in commercial real estate debt, including whole loans, mezzanine loans, preferred equity, and sub-performing and non-performing loans. Alternative lenders now represent 15% to 20% of annual CRE lending activity.
Over the years, content for the existing High Yield and Distressed Realty Assets (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. With this understanding, CREFC and HYDRA leadership/members undertook a thorough review of HYDRA’s membership and determined it would be best to reassemble the current HYDRA forum and guide its members to either:
- An Expanded Servicers Forum that more fully incorporates special assets/special situations or
- A new High Yield Investments/Alternative Lending Forum
Introducing the Alternative Lenders and High Yield Investors Forum
CREFC and the Board of Governors believe that launching a new and separate forum – the Alternative Lenders and High Yield Investors Forum – will provide a more befitting platform that better serves the needs of this growing and important source of market liquidity.
This new Forum will:
- Afford this CREFC member segment a clear, formal voice in CREFC,
- Allow CREFC to better navigate the rollout and ongoing development of a Debt Fund Index (a joint project between NCREIF and CREFC), and
- Provide members with a stronger voice with regulators and legislators on Capitol Hill.
Membership in this forum will include alternative lenders and high yield investors in the CRE debt and equity space*, and may include bridge and mezzanine loans, preferred equity, and special/distressed situations. Lenders and investors include debt funds (open or closed), public/private mortgage REITs, money managers, separately managed accounts (SMA), and other public or private entities. The forum would also include those third-party service providers and business partners who work closely with such lenders and investors. Importantly, this forum would be instrumental in the development and ongoing maintenance of the CREFC/NCREIF Open-End Debt Fund Index, with the goal of increasing transparency and liquidity in this important sector of the market.
Introducing the New Servicers Forum
A companion component of the HYDRA transformation is shifting the DRA portion of HYDRA to the Servicers Forum. Today, the Servicers Forum focuses on master servicing and special servicing (issues related to distressed or nonperforming loans/assets). Consolidating the constituents and discussion of relevant DRA issues into the Servicers Forum will enable increased focus on these important and timely issues.
CREFC, its Executive Committee, and Board of Governors believe that repositioning the DRA portion of the HYDRA Forum and adding it to the existing Servicers Forum will create better alignment within the servicing sector and allow for better synergies between performing and distressed loans/assets.
With this in mind, CREFC plans to realign the Servicers Forum to include two main focus areas:
- Servicing Administration
- Special Situations/Special Assets
Both constituents within the Servicers Forum will have separate leadership teams that will not only work within their respective components of the servicing business, but also interact with each other on a regular basis to present a 360-degree view of and insights related to the current state of their respective businesses. Note that both the current leadership within the Servicers Forum and the Distressed Realty Assets sub-forum of HYDRA will remain in place.
The newly cast Servicers Forum will represent market participants 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 loans and non-performing loans.
CREFC Member Action Required
CREFC members of both the current 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.
Forum sessions at the January Conference will incorporate the new Alternative Lenders and High Yield Investors Forum, as well as the newly expanded Servicers Forum. To sign up for a forum, please click here. For any forum related questions, please reach out to either Lisa Pendergast or Kathleen Olin.
* 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