Letter from the Editor

CRE Finance World, Winter 2014

Editor’s Page Letter from the Editor A publication of Winter issue 2014 sponsored by CRE Finance World Winter 2014 3 oming into 2014, the commercial real estate finance world once again looks like a terrific place to be. Capital is abundant and property fundamentals and values are solidifying after another year of slow but steady improvement. Meanwhile, with the unemployment rate dropping and a robust third-quarter GDP figure, the economy is showing signs of stronger growth. What’s more, Congress finally seems inclined to avoid the costly stand-offs that have done so much damage to business and consumer confidence. Against that backdrop, the debt markets are thriving. Life companies, banks, government agencies and CMBS programs are active. As of mid-December, global CMBS volume in 2013 looked set to top $100 billion in 2013, roughly double from $52 billion in 2012. US volume of about $90 billion will nearly double 2012 levels and non-US volume of $13 billion is about triple the production of the previous year. Now the question becomes: how does our market handle this prosperity? Do we forget the last crisis and push the envelope on each deal in order to win market share? Or can market players compete aggressively and hold the line on loan quality? It will be interesting to watch, just as it should be interesting to read our January 2014 issue of CRE Finance World, which is chock full of interesting articles, surveys and updates from CREFC officials and committees. See where market players come out on the question of the 2014 outlook for underwriting, volume and prices in a new survey that was developed by co-managing editor Nicoletta Kotsianas, Associate Director at Kroll Rating Agency, with the magazine’s editorial board. The 2014 outlook is also the focus of an all-star panel roundtable discussion moderated by Brian Lancaster, our editor and president of The Minot Group and adjunct professor at the NYU Stern School of Business. Readers will find useful a group of articles that address specific issues in today’s market. One discusses the questions raised by investors regarding the recent spate of bulk liquidations by special servicers. A series of articles encompass issues in individual property types: industrial (written by a team led by Dr. Victor Calanog at Reis), hotel (Talmage’s Edward Shugrue III), multifamily (Terri Magnani at Kroll) and retail (S&P’s Larry Kay). We go beyond the routine in articles about: the European debt workout situation (written by Nigel Almond and Hans Vrensen at DTZ), the growing need for Shari’a-compliant finance (a team at K&L Gates) and the new home rental securitization market (Harris Trifon of Deutsche Bank). Be sure to check out legislative and regulatory updates from CREFC staff — including updates on the important risk riskretention rules by Christina Zausner and the upcoming mid-term elections by Martin Schuh — and reports from CREFC Forums. And congratulations to Akash Shivashankara, an MBA candidate at Columbia Business School, whose article “Should All Real Estate Investors Be Value Investors?” won the magazine’s first student writing contest. Anyway, there’s plenty more, so dig in. Have a great conference and a prosperous year, Paul Fiorilla C Paul Fiorilla Co-Managing Editor CRE Finance World


CRE Finance World, Winter 2014
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