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CRE Finance World, Summer 2014

CRE Finance World Summer 2014 6 Past CREFC Leaders Reflect on Evolution and Growth of the Association John Salustri In 1994, the commercial real estate finance industry was faced with a challenge: pooling commercial mortgages and selling securitized bonds on those pools. Creating the loan documentation and developing practices and standards for the securitization of unique assets in a pool of commercial mortgages was an enormously more complex challenge than securitizing a homogenous pool of single-family mortgages. The Mortgage Bankers Association (MBA) made the first attempt to address this issue, and proposed to create a committee to address the treatment of commercial securitization. However, there were many in the industry who believed that commercial mortgage securitization was a viable financing platform and required significantly more priority and resources than the MBA was willing to devote. Certain members of the MBA felt the industry was facing a solid new advancement in financing, solid enough to go beyond the proposed committee treatment of commercial securitization. In response to this, Tom Wratten of Principal Commercial Advisors (now retired) and Joseph Forte (now with DLA Piper) decided that a trade association exclusively dedicated to commercial mortgage securitization was needed. The two then struck out and formed the Commercial Real Estate Secondary Market and Securitization Association to address these issues head on. But despite this initial drive, the organization nevertheless had some fits and starts before it eventually found its footing. Some practitioners in the industry were unsure of the long-term viability of commercial securitization, and that was reflected in a sometimes wavering commitment to the new group. It took strong leadership, a strategic plan and a commitment to the advances being made in securitization financing to galvanize the group. That came in 1998, and the true growth of the association began. In a few years, the CSSA would mature into the Commercial Mortgage Securities Association and ultimately the Commercial Real Estate Finance Council. Today, there is no remnant of uncertainty. Talk with the past presidents (now called “chairs”) of CREFC about their terms in office and you’ll find yourself on a timeline marking how the association has adapted to meet the challenges and opportunities that the commercial real estate finance industry faced. You will hear a unity of thought, an awareness and appreciation of the coming together of sometimes fiercely competitive industry players to forge an association that, as more than one president said, “is greater than us.” Over the past few weeks, contributing editor John Salustri chatted with a number of past leaders to hear their thoughts on their terms in office, what they accomplished and the progression of the organization against the backdrop of a dramatically shifting industry.


CRE Finance World, Summer 2014
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