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CRE Finance World, Autumn 2013

Available Now A publication of Autumn issue 2013 sponsored by CRE Finance World Autumn 2013 17 apartment market, however, it’s very difficult for us to make broad statements about meaningful improvements in fundamentals that are consistent with what we’ve seen happening with prices. When we are thinking about where these different sectors are in the cycle, that’s the most significant concern that I have right now. When the fundamentals are lagging, when their hasn’t been an appreciable change in the outlook for the economics, then we know that in some of these market segments, capital costs and capital flows are playing a larger role in the determination of market-clearing prices. Debt markets matter here. There are markets where there has been an undue share of appreciation over the last couple of years that we can attribute to very low cost mortgages, and it’s going to be in those kinds of markets where the adjustment is going to be most difficult. Looking at this from the perspective of some of the maturing debt, that broad, slow improvement in the economy certainly helps to create some stability in the financial and capital markets and helps improve the fundamentals. But there are also the retail neighborhood and community shopping centers on the periphery of your secondary market, where in spite of improvements in economic conditions refinancing will be a challenge without new equity. I think we’re still going to have to deal with those issues whether or not capital is available. People are looking at the CMBS market, looking at the wave of maturities, but when we actually dig a little bit deeper, a lot of those properties are going to be mismatches with underwriting standards and lenders’ desired risk profiles. That’s going to be an issue. The apartment market is actually one where there is greater sensitivity in our analysis to changes in the interest rate environment, in part because of the structural relationships between apartment CRE Finance World Roundtable: Macro Issues Facing CRE Finance CRE Finance Council CMBS E-Primer CRE Finance Council, through its Education Committee, is now offering its members the newly updated CMBS E-Primer series. This convenient e-book gives the reader an introductory, yet comprehensive, overview of Commercial Mortgage Backed Securities financing. The series covers the following: • An Overview of CMBS • CMBS History and Evolution • Originating and Underwriting Commercial Mortgages for CMBS • Structuring • AAA Rated CMBS Securities • Investing in Mezzanine CMBS • Investing in IO • Investing in B-Piece CMBS • Closing CMBS Transactions Parties, Key Documents and Servicing • An Overview of the Taxation of REMICs • CMBS Subordinate Debt To purchase the E-Primer, or for more information, visit www.crefc.org or contact Stephanie Heliker, Production Manager, at sheliker@crefc.org. a publication of $249. CREFC EduCaTion SERiES


CRE Finance World, Autumn 2013
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