Letter from the Editor

CRE Finance World, Summer 2013

Editor’s Page Letter from the Editor A publication of Summer issue 2013 sponsored by CRE Finance World Summer 2013 3 n my past life at Commercial Mortgage Alert, nothing got my juices flowing like the stories about the B-piece market. Whatever happened with that tiny group of investors pretty much dictated the health of the rest of the CMBS market. But even more than its relative importance to CMBS, what I loved was the accomplishment of breaking news because everything about B-pieces seemed to be cloaked in double super-duper secrecy. As a journalist, getting a scoop about B-pieces was akin to a Washington reporter breaking news about a DC scandal (well, maybe that isn’t so hard anymore). Like a baseball player no longer worried about being sent back to triple-A for seasoning, my report on the “cartel” back in the late 1990s, and all the attention it got, made me feel like a permanent part of the market. Anyway, when the editorial board decided to do a roundtable on the B-piece market for this issue, I was all too happy to moderate. So much has changed over the last few years in the CMBS world in terms of issuance, underwriting, ratings, regulations and so on, but the health of the B-piece market remains critical. The market needs investors not only to buy the most-junior bonds, but also to perform the kind of necessary due diligence to prevent loan quality from slipping to the lowest common denominator. So please take a look at our roundtable, with our expert group of participants. And don’t stop there, since the issue is filled with great articles on critical topics. For example, a team from PPR led by Stephen Miller analyzes future refinance risk in light of different economic scenarios; Sam Chandan of Chandan Economics provides an update on the state of the commercial banking sector; a team from Reis asks the question of what will happen to property capitalization rates when interest rates inevitably rise; a trio from Freddie Mac looks at the question of why the default rates of life companies’ remained low when they were spiking for other types of lenders; and a team from S&P looks into the losing hand CMBS has had in the gambling meccas of Las Vegas and Atlantic City. Also be sure to check out the regulatory update from CREFC’s Martin Schuh; an opinion piece about GSE reform by Walker & Dunlop CEO Willy Walker; two articles about bankruptcy, one written by a team from Barnes & Thornburg and another by David Wallace and Kelley McLaren of Triglid; and still more articles that I don’t have the space to mention. Enjoy, and please don’t hesitate to provide feedback to myself or any member of our editorial team or CREFC staff. Regards, Paul Fiorilla I Paul Fiorilla Prudential Real Estate Investors


CRE Finance World, Summer 2013
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