The TreppWire Podcast: A Commercial Real Estate Show

At one point during the month of June, it appeared that a new all-time high for CMBS delinquencies would be reached. The final numbers posted at the end of the reporting cycle, however, showed that the 2012 high still remains the peak (for the time being). In this week’s episode, we dig into this month’s delinquency report, potential relief options for hotel owners, takeaways from the Fed’s bank stress tests, green shoots for corporate CLO investors, and the Nathan’s Hot Dog Eating Contest.

Episode Notes:

Is the glass half empty or half full for the economic recovery? (1:10)

CMBS delinquency rate nears all-time high (14:00)

Reaction to Barry Sternlicht’s “extreme distress” comments (17:57)

Relief for hotel owners? (24:28)

Retail headlines of the week (31:26)

Takeaways from the Fed’s bank stress tests (34:56)

Green shoots for corporate CLO investors (39:44)

The Fourth of July hot dog eating contest (43:55)

The economic recovery: A glass half full or half empty? We examine the congressional request for CMBS borrower relief, delinquency rates by MSA, retail stories that caught our eye, the future of affordable housing, the increase in “problem banks,” and the importance of CLOs to the broader market.

Episode Notes:

Is the glass half empty or half full for the economic recovery? (1:03)

The congressional request for CMBS borrower relief (6:42)

Surprises in delinquency rates by MSA (13:33)

Retail stories that caught our eye (23:59)

The future of affordable housing (28:48)

The FDIC’s reported increase in “problem banks” (32:17)

Why CLOs are so crucial to the broader market (38:38)

Vegas baby, Vegas? (42:25)

We welcome Brian Stoffers, Global President of Debt and Structured Finance at CBRE and 2020 Chairman of the Mortgage Bankers Association (MBA). In a wide-ranging conversation, Mr. Stoffers discusses trends he’s seeing in the CRE lending space, property type performance, the impact of “forbearageddon,” and how the COVID-19 crisis will change commercial real estate in the long-term.

Episode Notes:

Outlook for the recovery (1:45)

Any notable valuation trends since the onset of COVID? (3:59)

What we’re seeing on the lending side (6:20)

A new normal in market share? (8:18)

Fannie and Freddie reserve requirements (10:30)

How has the office underwriting process changed? (12:35)

Differences in geographic performance? (15:33)

Impact of “forbearageddon” to investors (18:07)

Office “hub and spoke“ model (21:53)

Future of business travel (or lack thereof) (25:25)

The lending slow-down (29:48)

What does the deal pipeline look like? (35:50)

Investor appetite for ESG reporting (38:49)

We welcome Andrew Jacobs, Head of Structured Finance at Trepp, to examine signs of stress in the corporate CLO market. We also discuss the potential record-breaking CMBS delinquency rates, the appraisal reduction process, this week’s major headlines in lodging and retail, and the migration from big cities. We also make weekend plans for a trip to the drive-in movies.

Episode Notes:

Record breaking CMBS delinquency rates? (4:04)

Spotlight on the CMBX 13 index (9:15)

This week’s lodging and retail headlines (11:05)

The appraisal reduction process (22:32)

Is the appeal of big cities wearing off? (27:15)

Signs of stress in the corporate CLO market (35:06)

Winners and losers in CLOs (40:24)

Drive-in movie theater weekend plans (45:17)

In this special episode, we welcome Tammy and David Goldfisher from The Henley Group, borrower advocates and experts in CMBS loan restructuring. With loan forbearance being top of mind for many in commercial real estate, Tammy and David share their insights into the borrower and special servicer negotiation process and discuss what they are seeing on the ground.

Episode Notes:

What type of forbearance agreements are happening right now? (5:19)

What makes a borrower negotiation successful? (9:53)

Negotiation process by property type (13:11)

Parallels to the last financial crisis (17:13)

Will retail borrowers be able to find relief? (22:44)

Predictions on potential structural changes in CMBS (27:56)

Challenges for borrowers in the special servicing process (29:55)

Macro-economic expectations (38:27)

The wave of bad news in the retail market, what we expect to see in June CMBS remittance data, the CMBX 7 index, credit supply risk in the corporate CLO market and most importantly, our Father’s Day wish lists. Come for the market commentary, stay for the stories of playing Little League Baseball with Kevin James of “The King of Queens.”

Episode Notes:

Macro market news and our thoughts on the recovery (1:10)

More bad retail news (7:13)

What to expect in June CMBS delinquency data (12:26)

One third of all malls may be done? (13:44)

A scary survey on expiring leases (22:24)

Drilling down into the CMBX 7 index (26:31)

Credit supply risk in the corporate CLO market (29:23)

Our Father’s Day wish lists (32:20)

In this special episode, we welcome Principal Dan McNamara and Managing Director Catie McKee (aka the “Queen of Malls”) from MP Securitized Credit Partners. In what was dubbed “the next big short” by some, investors bought credit-default swaps against subordinate bonds in the CMBX 6 index, which has heavy concentrations of shopping mall and retail loans. Catie and Dan are well known for their bet against CMBX 6 and discuss the strategy and execution behind shorting U.S. malls.

Episode Notes:

The strategy behind shorting U.S. malls and CMBX 6 (2:05)

Performance expectations (9:36)

Systemic risk in CMBX (13:17)

Retailers that may survive the carnage (15:30)

The art of visiting malls (19:22)

Will more mall owners turn to “jingle mail”? (21:21)

Break-even pricing for in-line mall tenants (27:14)

Who will play Catie and Dan in a sequel of “The Big Short” (29:29)

We break down the massive spike in CMBS delinquencies (the largest month-over-month increase we’ve seen since 2009), the financial performance of malls, loan forbearance expectations, office exposure in the CMBX 12 index, office loan refinance risk, an important court decision for the syndicated loan market, and what our summer vacations might look like.

Episode Notes:

Where are we in the economic recovery? (00:59)

The largest jump in CMBS delinquencies since 2009 (7:45)

Analyzing the financial performance of malls (13:36)

Loan forbearance expectations as we enter June (20:01)

Looking at the CMBX 12 index and office exposure (25:13)

Lease comp data reveals office loan refinance risk (29:51)

An important court decision: syndicated loans are not securities (32:58)

What will our summer vacations look like? (33:55)

In this special episode of The TreppWire Podcast, we welcome Jan Kniffen, CEO of J Rogers Kniffen Worldwide. As a retail consultant and a former retail executive with decades of experience in the industry, Mr. Kniffen helps us make sense of the current state of retail, its future in a post-COVID world, and potential opportunities in the market.

Episode Notes:

How will department stores and other non-essential retailers weather this downturn? (2:55)

What’s the future for regional department stores? (6:08)

What happens when a mall loses 20% of its tenants? (9:33)

Classic mall operators vs new players (12:49)

COVID related expenses impact on the bottom line (17:50)

Retail jobs post-COVID (27:23)

We discuss borrower relief options, the two schools of thought on the future of office space, the newest data on CMBS delinquencies, the retail consumer, the ramifications of a big CLO buyer pulling out (for now), and our excitement for the reopening of both Disney World and the NHL.

Episode Notes:

Signs of hope in the market (0:53)

CMBS delinquencies continue to rise (7:44)

How borrowers can potentially seek relief (12:33)

Where will the future retail consumer be? (14:49)

Is office-centricity a thing of the past? (27:42)

“I’m going to Disney World!” (33:07)

A big Japanese CLO buyer pulls out (for now) (37:52)

The return of the NHL (43:10)