Forum Spotlight: Portfolio Lenders Forum—Insurance Company and Bank Sub-Forum

CRE Finance World, Summer 2013

Forum Spotlight: Portfolio Lenders Forum and the Insurance Company and Bank Sub-Forum Clay Sublett The mission of the Insurance Company and Bank Portfolio Lender Sub-Forum(s) has been to add value to its constituent through representation on regulatory matters, assistance in managing perceptions of the rating agencies, promotion of best lending and portfolio management practices and to provide an open environment for lenders to share thoughts and ideas. The leadership team of the Sub-Forum(s) continues to seek increased involvement of portfolio lenders, both insurance companies and banks, in order to provide a board base of perspectives across the entire commercial real estate finance industry. With banks and insurance companies holding nearly 50% of the outstanding debt on commercial real estate in the United States, CREFC is significantly underweight in these categories relative to the role that they play in the industry. The Sub-Forum(s) have been active on all fronts in 2013 with the following initiatives and schedule of events. January CREFC Conference Forum Presentation Conference topics included exploration of trends in lending through a pre-conference survey of forum members and a panel discussion on measurement of investment performance and lessons learned in the down-turn. Total attendance for the Forum discussion numbered over 100 persons. CREFC/Trepp Insurance Company Portfolio Lenders Survey Results from the mid-year 2012 survey were presented at the January CREFC Conference. The Portfolio Lenders Survey was established to collect previously unavailable industry performance data that could be used in assessing investment performance during the down-turn and for general benchmarking purposes of the participating companies. A total of 19 companies participated in the last version of the survey, representing approximately $135 billion in combined commercial mortgage assets. CRE Finance World Summer 2013 80 Survey results delivered to participating companies are tailored to provide a peer comparison and the results of all firms on various questions regarding portfolio performance (delinquencies, losses, loss severity, reserves and average portfolio metrics). Survey highlights (all for the period ending June 2012) were as follows: • Strong investment performance with only 5 basis points of average realized losses on the portfolios during the first six months of 2012 • An average delinquency rate (all loans over 30 days) of only 0.35% • An average portfolio loan to value of 59.1% • Approximately 3% of all holdings were above a 100% loan-to-value • The average portfolio debt service remained at 1.8 times • 7% of holdings were below breakeven in debt service coverage We would like to thank Trepp and CREFC for their continued support with the survey. A request for year-end 2012 data has been distributed and the results should be presented at the June Conference. May After-Work Seminar in Chicago An after-work portfolio lending seminar hosted by the Insurance Company and Bank Sub-Forum(s) was scheduled for May 2nd in Chicago. Topics of discussion focused on alternative investment strategies including club/syndicated lending and investment in construction and transitional assets. The structural underwriting standards associated with these strategies were also discussed. Forum Membership Report Membership in the Portfolio Lenders Forum (Insurance Company and Bank Sub-Forums) stands at over 130 individuals representing over 50 companies and we hope to continue advances in these numbers throughout the remainder of 2013. T KeyBank Real Estate Capital Chair of the Portfolio Lenders Forum, Bank Sub-Forum Todd Everett Principal Real Estate Investors Chair of Portfolio Lenders Forum, Insurance Company Sub-Forum


CRE Finance World, Summer 2013
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