The TreppWire Podcast: A Commercial Real Estate Show

We examine August CMBS remittance data and what the early delinquency numbers are telling us about the state of the recovery. We dig into big box retail earnings, the flurry of hotel headlines this week, and underwritten NOIs. Professor Manus Clancy also takes us to school for a lesson on CMBS loan modifications.

Episode Notes:

Big box retail earnings (0:58)

Early indications from August CMBS remittance data (8:03)

Hotel (and AirBnB) headlines (17:08)

Intriguing stories in the office sector (24:34)

CRE Deal of the Week (31:06)

Analyzing underwritten NOIs (33:23)

CMBS loan modifications 101 (42:23)

CLO exposure to private prison operators (48:38)

Will college reopenings last? (53:41)

We welcome Ryan Severino, Chief Economist at JLL, to discuss government stimulus, potential demographic and systemic changes, “pre-existing conditions” in CRE, the Presidential election’s impact on the markets, and the future of higher education.

Episode Notes:

Too much or too little government stimulus? (3:11)

The election’s potential impact on the markets (11:16)

Relief for the hotel industry? (14:49)

Creative disruption (18:33)

Potential demographic and systemic changes (23:09)

“Pre-existing conditions” in CRE (28:38)

How an economist’s life has changed (32:37)

Economic indicators is Ryan looking at? (35:56)

The future of secondary education (40:08)

Five months into the pandemic, the lodging and retail sectors have been battered. In this week's episode of The TreppWire Podcast, we break down recent news and performance in those sectors. We also discuss underwritten NOIs, appraisal reductions, the CRE “Deal of the Week,” our new Tom Petty “I Won’t Back Down” index, and whether or not we’ll be going to the movie theater anytime soon.

Episode Notes:

Unemployment and a second stimulus (0:53)

Is the glass half empty or half full for the economic recovery? (3:16)

Looking at underwritten NOIs (9:27)

Simon Property Group and Amazon (21:18)

An update on the lodging sector (30:53)

The Tom Petty “I Won’t Back Down” index (34:00)

CRE Deal of the Week (36:24)

Appraisal reductions explained (40:46)

AMC Theaters reopening (48:59)

We welcome Orest Mandzy, Managing Editor of CRE Direct News, to share the big takeaways from REIT earnings season. With Orest’s REIT expertise, we dig into performance by sector - hotel, retail, multifamily and office. We also discuss the growing forbearance tally, noteworthy stories in the corporate CLO market, and our “Deal of the Week.”

Episode Notes:

Observations from Philly (1:12)

The next round of stimulus relief (5:47)

Clobbered hotel REITs (12:20)

Are retail REITs doing any better? (20:22)

Occupancy impacting multifamily REITs yet? (24:22)

Mortgage REIT performance (31:16)

A look at office REITs (37:14)

Deal of the Week (46:27)

Forbearance tally continues to grow (48:03)

Noteworthy stories in the Corporate CLO market (54:32)

Will virtual education work? (56:17)

We welcome Lonnie Hendry, Head of Advisory Services at Trepp, for a deep dive into the HOPE Act and the potential impacts of eliminating the 1031 Exchange. We also analyze the big drop in the CMBS delinquency rate and shadow vacancy rates in the office market. In our new “Deals of the Week” segment, we highlight notable CRE transactions across the country.

Episode Notes:

Observations from Texas (1:16)

The big drop in CMBS delinquency rates (3:00)

What’s happening with JC Penney? (13:22)

Deals of the Week (17:33)

Shadow office vacancy rates (22:48)

Breaking down the HOPE act (31:34)

A deep dive into the 1031 exchange (43:46)

Concerns in the CLO market (48:01)

No Black Friday shopping this year (51:50)

We welcome Donald Sheets, Managing Director at Broadshore Capital Partners to break down the current state of the CRE debt market. In a wide-ranging conversation, we discuss the disconnect between Main Street and Wall Street, underwriting office loans in this climate, evaluating investment opportunities, the CRE “lending pie,” and the current landscape of student housing. Don also shares his takeaways from a cross-country road trip adventure during the pandemic.

Episode Notes:

The disconnect between Main Street and Wall Street (2:07)

Who’s selling loans? (8:31)

Pricing loans in the office market (11:15)

Don’s cross-country pandemic road trip (16:43)

What investments is the market offering? (22:05)

Will the CRE lending pie shrink or grow? (28:41)

Distressed asset potential in the multifamily space (33:20)

The landscape of student housing and higher education (36:00)

We welcome Vivek-Anand Dattani, VP of Commercial Operations from Trepp’s London office, to examine signs of progress and peril in the US and European CRE and CLO markets. We also discuss the preliminary July CMBS delinquency data, revisit the retail-heavy CMBX 6 index, and look at the lasting impacts of The Dodd-Frank Act. Last but certainly not least, Joe McBride delivers a special ode to Winston Churchill.

Episode Notes:

Signs of progress and peril in U.S. CRE (3:35)

What we’re seeing in Europe (10:26)

Preliminary July CMBS delinquency data (21:44)

The State of the European CMBS market (28:00)

Revisiting the retail-heavy CMBX 6 index (34:18)

The potential long-term global impact of remote work (41:27)

Battered companies with CLO exposure (45:33)

The 10 year anniversary of Dodd-Frank (50:56)

The return of sports!!! (54:28)

Joe’s ode to Winston Churchill (57:25)

We’re only mid-way into July, but early indications are that delinquency rates are improving. In this week’s episode of The TreppWire Podcast, we examine the factors behind a potentially declining CMBS delinquency rate, noteworthy CRE headlines of the week, the CMBX 10 index, shifts in the office market, and takeaways from bank earnings.

Episode Notes:

Signs of a tepid recovery (1:10)

Improving CMBS delinquency rates? (6:11)

Noteworthy CRE loan headlines this week (13:04)

Digging into CMBX 10 (18:58)

Manus and Joe’s PSA: Wear a mask (22:31)

Back to school? (26:07)

Shifting trends in the office market (29:22)

Takeaways from bank earnings (33:03)

“Necessity is the mother of invention” (35:54)

We welcome Rick Jones, Partner and Co-Chair of Dechert’s finance and real estate practice. Under his leadership, the 150 attorney practice focuses on sophisticated capital markets and mortgage finance transactions, providing lenders with innovative deal structuring, creative financing strategies and efficient execution. In this episode, we discuss structural changes that may come out of this crisis, a federal bailout for CRE, the potential impacts of the upcoming U.S. presidential election, and changes to CRE legal work in this environment.

Episode Notes:

Comparing this crisis to the Great Recession (0:34)

Structural changes coming out of this recession? (2:05)

How has COVID-19 changed the type of legal work in CRE? (4:02)

The equilibrium between borrowers and lenders (5:38)

A federal bailout for the lodging industry? (7:30)

Lending winners and losers coming out of this environment (12:02)

Potential impacts of the upcoming U.S. presidential election (14:48)

The shifting needs of office tenants (16:48)

Future of CECL? (18:22)

Where is the systemic risk? (20:19)

Predictions for conferences resuming (23:16)

Takeaways from Mr. Jones’ conversation with Sam Zell (25:57)

The force majeure battle (27:22)

We are officially past the half year mark, which means the release of our bi-annual report in collaboration with CRE Direct. In this week’s episode of The TreppWire Podcast, we discuss our Mid-Year report and the magnitude of the pandemic’s effects across the hardest hit sectors. We also analyze the recent push for CMBS relief, CRE loan default and loss projections, the European CLO and CMBS markets, and Manus Clancy’s revised bucket list.

Episode Notes:

Is this week’s glass half empty or half full for the economic recovery? (1:02)

Retail headlines and the borrower “ring of honor” (7:30)

The push for CMBS relief (14:30)

Potential legal and regulatory impacts of COVID-19 (23:47)

The Mid-Year report (25:56)

Analyzing CRE Loan Defaults & Loss Rates: Serious Challenges Ahead (30:46)

An update on the European CLO and CMBS markets (35:51)

Manus Clancy’s revised bucket list (38:48)