Letter from the Editor

CRE Finance World, Autumn 2012

Editor’s Page Letter from the Editor Paul Fiorilla Managing Editor T have been uttered back-to-back more times in 2012 than how they impact the structured finance waterfall.servicers were more proactive in commenting on improvement/disposition plans. FTI Consulting’s Michael VanderLey, CynthiaNelson and Ronald Greenspan discuss recent court rulings andhe ancient sage who wrote that “there is nothing newunder the sun” no doubt was correct on the subject ofhuman behavior. But every year produces something new.In language, for example, the words “fiscal” and “cliff” in every preceding year in human history combined. Just as surely, For several years after the market collapsed in the recent downturn, humans will be better off when that phrase is consigned to the CMBS issuance was exclusively comprised of fixed-rate and vanilla dustbin of history. conduit deals. Edward Shugrue III, maybe taking a contrarian view, thinks that it might be a buying opportunity for floaters and Technology is another area where much is new every year. I’d love single-borrower deals. to see what the author of Ecclesiastes would do with an iPhone. And although it may not be as exciting as the introduction of the As usual, some articles discuss real estate fundamentals and loan iPhone 5, the issue you are reading represents a technological performance. Larry Kay and Jason Lami of S&P write about the advance, being the Commercial Real Estate Finance Council’s struggling office sector, which has seen an increase in the total first-ever digital issue. volume of delinquencies over the past year as it deals with tepid demand, shadow supply and changing demographics. Reis’ Victor The magazine is essentially the same as those regularly distributed Calanog, Brad Doremus and Michael Steinberg discuss monthly at the January and June Conferences. But distributing digitally serves changes in the fundamentals of the major property sectors so far to reduce costs, enabling us to produce a third issue that provides in 2012. No surprise that apartments have fared the best to date, CREFC Members with more important news and information about while other sectors are muddling through — but will that continue? the fast-changing world of commercial real estate finance. An innovation within the magazine is that the issue’s advertisements I thought I might be able to get through this without mentioning the are interactive — readers can click on a link to go directly to the upcoming Presidential election, but there is no way to avoid it. The advertiser’s site, making it quicker and more convenient for Members election is important – not just because it will provide relief from to interact. incessant election coverage, but there are in fact critical public policy issues to be determined by the outcome. One of those is As usual, the issue is packed with helpful articles. Midland Loan the fate of Fannie Mae and Freddie Mac, which are in the process Services’ Stacey Berger asks whether the CMBS industry would of being privatized. Chris DiAngelo of Katten Muchin Rosenman be better served by changing the way in which servicing contracts discusses the options, contending that the agencies’ relative success are awarded. Servicers traditionally have bid to win CMBS servicing in the multifamily segment in recent years (in contrast to the rights, but would a fee-for-service model make more sense? The single-family sector) increases the odds of a solution in that arena. article is especially timely given the recent rally in CMBS prices, which has once again made securitization programs competitive And there is more, so please dive in and enjoy. As always, don’t with life insurers in terms of pricing. Servicing gives lifecos a hesitate to provide feedback on any of the articles or the magazine competitive advantage with many borrowers — could that change in general. We’re happy to hear your thoughts. if servicing rights were awarded in a different manner? Regards, On the subject of special servicing, Darrell Wheeler, Vivek Tiwari and Joe Yu of Amherst Securities analyze the performance of the Paul Fiorilla various firms in dealing with resolutions. They wish that special CRE Finance World Autumn 2012 4


CRE Finance World, Autumn 2012
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