The TreppWire Podcast: A Commercial Real Estate Show

The big bank Q3 earning reports this week show us that banks with a higher concentration in the capital markets may be weathering the storm better than their peers. In this week's episode, we break down bank earnings, retail property valuations, shadow delinquencies, hotel exposure by MSA, and the potential reduced demand for office space. The podcast team also shares their personal dress codes for remote work.

Episode Notes:

Consumer and investor sentiment (1:01)

Retail property valuations (4:29)

Shadow delinquency rates (24:22)

Hotel exposure by MSA (32:33)

A reduced demand for office space? (35:24)

UK market round-up (39:42)

Deal of the week (48:09)

Bank earnings in Q3 (51:15)

Our dress code for remote work (60:00)

We welcome KC Conway, Chief Economist at CCIM, to discuss his predictions for the market, key CRE metrics for assessing the recovery, the convergence of retail and industrial, the increased focus on ESG, areas of opportunity, and the impact of the U.S. election and potential regulatory changes on CRE.

Episode Notes:

The vibe in Georgia (1:55)

A W shaped recovery (3:30)

Key CRE metrics to watch (13:30)

The convergence of retail and industrial (21:22)

Increased focus on ESG (24:43)

Areas of opportunity in CRE (30:41)

The impact of the election on CRE (32:53)

Amid the disruption caused by the coronavirus pandemic, there have been a number of trends that have directly impacted demand in the self-storage sector. In this week's episode, we analyze the “recession-resistant” self-storage market, the surge in retail and lodging special servicing rates, and the loan payoff report. Manus Clancy also hands out his highly coveted Tom Petty “I Won’t Back Down” awards.

Episode Notes:

Are we losing stimulus momentum? (0:57)

The surge in retail and lodging in special servicing (5:17)

Self-Storage: Analyzing a "recession-resistant" sector (13:25)

Economic indicators to watch (18:13)

Movie theater CLO exposure (21:03)

The Tom Petty “I Won’t Back Down” awards (28:30)

The loan payoff report (36:21)

Hotel loans coming to market (46:01)

Certain provisions of the CARES Act provided community banks a delay in the implementation of CECL (current expected credit losses). In this week's episode, we take a deep dive into the world of CECL, the declining CMBS delinquency rate, recent CRE valuations, and CMBS issuance and pricing. We also discuss some creative solutions for celebrating Halloween this year.

Episode Notes:

Positive news amidst uncertainty (1:01)

The declining CMBS delinquency rate (10:19)

Recent CMBS issuance and pricing (22:49)

Looking at recent CRE valuations (32:24)

Analyzing office lease data (40:00)

European market round-up (41:57)

Deal of the Week (45:16)

CECL 101 (47:18)

Since the beginning of the pandemic, reported occupancy rates have remained healthy in the office and multifamily property sectors. However, there are two types of occupancy to consider: physical and economic. In this week's episode, we welcome Lonnie Hendry, Head of Advisory Services at Trepp, to break down occupancy rate calculations, the latest regulatory issues, the performance of CRE loans in bank portfolios vs CMBS, and growth in the single family rental market.

Episode Notes:

The regulatory roundup (1:09)

Performance of CRE loans in bank portfolios vs CMBS (14:13)

The big CRE stories this week (22:33)

A look at the single family rental market (32:14)

Continued uncertainty in the office market (40:24)

Physical vs economic occupancy rates (49:05)

Deal of the week (52:23)

Bankruptcies with CLO exposure (56:23)

In the office market, we’re seeing the fits and starts of a physical return to work play out this week. In this episode, we discuss the mixed bag of office news, takeaways from the mid-month CMBS delinquency report, the first case we’ve seen of a loan deferral with no advancing, and what the holiday season might look like in retail this year.

Episode Notes:

A relief bill for CRE is looking very unlikely (1:10)

Mid-month CMBS delinquency numbers (6:05)

Amazon entering the luxury space (15:07)

UK retail news (19:14)

The fits and starts of returning to the office (22:07)

Deal of the Week (36:12)

A loan deferral with no advancing (40:07)

CLO News: Delta and Chuck E. Cheese (45:12)

What will the holiday season look like for retail? (49:58)

Over the last six months, we’ve covered the movements of the CRE finance sector. Looking forward, what changes could we see in the market as a result of the pandemic and the flash recession? In this week's episode, we discuss potential changes in CRE finance, problems in the multifamily sector, the wave of retail news, student housing loans, and strategic defaults in bank loan portfolios. Continuing with our music theme from last week, Manus is feeling nostalgic for the days live Allman Brothers shows.

Episode Notes:

Latest on the pandemic relief bill (1:14)

A wave of retail news (8:34)

Potential problems in multifamily (19:38)

The return to school: student housing loans (28:34)

Banks returning to the office (31:18)

Deal of the week (43:12)

Strategic defaults in bank loan portfolios (45:37)

The future of CRE finance (48:17)

The return of vinyl (55:26)

We discuss the CDC’s new eviction moratorium, the Financial Times story covering stress in the CRE market through the lens of a CMBS investor, the increasing focus on the office sector, and hotel valuations in this environment. The 10-year Treasury yield dipped this week after its eight-week high, which spurred Manus’ thoughts for a deep dive. In honor of Labor Day Weekend, the team provides its list of road trip songs befitting of the year 2020.

Episode Notes:

The CDC’s eviction moratorium (0:59)

Signs of stress in the CRE market (12:06)

A deep dive into CMBS delinquency data (14:01)

The increasing focus on the office sector (19:43)

Hotel valuations in this environment (28:00)

Retail news from the UK (34:18)

Deal of the week (41:09)

Treasury yield 101 (43:30)

The worst songs of all-time (49:34)

In a normal summer, August results in lighter volume (and more volatility). Of course, this has been a summer like none other. In this week's episode, we break down the macro trends, the most recent CMBS delinquency data, potential forbearances, retail as “the falling knife,” and the top secondary MSAs for CRE investment. Inspired by Bruce Springsteen, Manus explains the similarities between Texaco road maps and the early CMBS mega deals.

Episode Notes:

Not your typical August (1:11)

Takeaways from this month’s delinquency data (10:45)

Is retail the “falling knife”? (14:39)

A data-driven approach to assessing property values (22:44)

The debate on when to return to the office (26:48)

The CRE Deal of the Week (38:03)

Top secondary MSAs for CRE investment (42:20)

Comparing underwritten vs actual NOI (44:58)

Life insurance commercial return index surges in Q2 (50:57)

CLO exposure to college cafeterias (52:37)

We welcome Fritz Kaegi, Cook County Assessor and former portfolio manager, to discuss CRE property valuations in Chicago, reforming the tax assessment process, the impact of COVID-19 on assessments, and his experience transitioning from the private sector to public office.

Episode Notes:

Assessing CRE property values in Chicago (5:03)

Reforming the assessment process(8:58)

The biggest challenge during Fritz’ first year in office (11:01)

Generating transparent property valuations (16:45)

The impact of COVID on CRE valuations (21:38)

From the private sector to public office (26:43)

The current vibe in Chicago (30:54)

Opportunities in industrial (34:31)

For additional resources from the Cook County Assessor's Office, visit trepp.com/the-treppwire-podcast