CREFC's B-Piece Investors Forum 2022 Update
September 12, 2022
Together, Lyndsay, Zach, and Jason form the “Leadership Working Group” for CREFC’s B-Piece Investors Forum. Importantly, this group sets the agendas and priorities for the Forum, as well as represents their constituencies on CREFC’s Policy Committee.
Key B-Piece Investors Focus Areas
- Maintaining discipline on new issue credit as increasing interest rates are reducing cushions in DSCR and pushing up cap rates
- Though delinquencies and special servicing rates continue to decline, directing certificate holders are concerned about those assets in special servicing, as increasing interest and cap rates impact exit strategies
- Rethinking loan structures—cash flow sweeps that are supposed to spring when a credit event happens aren’t working as designed
Looking ahead, leaders are optimistic that fixed-rate volume will improve relative to 2022 and would welcome more transactions. The forum would like to continue the push towards better use of technology, including use of AI, to improve the speed of reporting from borrowers to servicers and trustees to investors. Challenges for this sector are the uncertain economy and the staying power of the post-COVID recovery in hotels and retail and the still unfolding effect on office.
What's next: Forum leaders are planning a virtual forum wide legislative and regulatory policy update and will soon be formulating the agenda for CREFC’s January Conference.
To join the B-Piece Investors Forum, please register here. For any forum related questions, please contact Kathleen Olin.