The Mortgage Observer December 2012

DECEMBER 2012 DECEMBER 2012

CREFC’s Renna Surveys Post-Election Landscape

Q&A The M.O. talks end-of-year with Kramer Levin partner

Jay Nevelo�

POWER PROFILE

STARWOOD PROPERTY TRUST

Co-Op CityWells Fargo Provides $621.5 M. to Keep It

Aff ordable

In Depth LookWhich Banks are Adding to

Their Ranks in Order to Grab a Share of 2013’s Activity

DebtXLoan Sale Advisory Firm Charts Continued Rise in

CRE Loan Prices

International Gem TowerThe Site Where Extell’s

Tower is Rising Has a Rich History

POWER PROFILE

TMO.1212.CS3.COVER.indd 1 11/29/12 5:36:26 PM

Relationship Driven.Execution Focused.Only Meridian Capital Group’s powerful

Meridian Capital Group, LLC

220 Water Street134-Unit Multifamily BuildingBrooklyn, NY

$52,000,000

1 Battery Park Plaza New York, NY 10004 | 212 972 3600 |

Aaron Appel, Managing DirectorKeith Kurland, Vice President

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321 West 44th Street, New York, NY 10036 212.755.2400

Carl Gaines Editor

Jotham Sederstrom Editorial Director

Alessia Pirolo Staff Writer

Sam Chandan Joshua Stein

Columnists

Michael Stoler Contributor

Noam S. Cohen Copy Editor

Barbara Ginsburg Shapiro Associate Publisher

Ed Johnson Production and Creative Director

Peter Lettre Photo Editor

Christie Wright Designer

Lisa Medchill Advertising Production

OBSERVER MEDIA GROUP

Jared Kushner Publisher

Mike Albanese President

Barry Lewis Executive Vice President

Robyn Reiss Vice President of Sales

Michael Woodsmall Director of Development, Real Estate Titles

Zarah Burstein Marketing Manager

Mark Pomerantz Controller

Tracy Roberts Accounts Payable Manager

Ian McCormick Accounts Receivable

For real estate advertising, contact Robyn Reiss at [email protected], or call 212-407-9382.

For financial advertising, contact Barbara Ginsburg Shapiro at [email protected],

or call 212-407-9383.

To subscribe to Mortgage Observer Weekly, The Mortgage Observer’s companion PDF

delivered directly to your inbox every Thursday, sign up at commercialobserver.com/mortgage-observer-weekly-signup

December 2012 / Contents

Editor’s Letter 02

News Exchange 04Mortgage originations, note sales, investments and industry research Wells Fargo Closes $621.5 Million Co-op City Refi Loan Prices Continue Upward Swing From the Vault—On the Gem Tower’s Site The Largest Loans of the Month

In-Depth Look 8New Hires Signal Banks’ Growth Heading Into New Year by Michael Stoler

Scheme of Things 10Monthly charts of commercial real estate financings in the boroughs

Stein’s Law 12Not So Fast! (The Mezzanine Loan Surprise) by Joshua Stein

The Basis Point 13Challenges at the FHA Were Foreseen by Sam Chandan

Work Force 14 Hirings, promotions, defections and appointments

Power Profile 18 Starwood Property Trust’s Executive Team by Alessia Pirolo

What Lies Ahead 24 Lame Ducks, the Fiscal Cliff and Finding a Way Forward: A Post-Election Analysis by Stephen Renna

Q&A 28 Jay Neveloff from Kramer Levin Naftalis & Frankel by Carl Gaines

Culture 29 Walk It Off by Carl Gaines

The Sked: December 30 Our picks for the month’s must-attend events

Of Interest 32 An index of all the people, places, addresses and companies mentioned in this issue

Cover Photo by Will O’Hare

24

296

18

1

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2

Editor’s Letter / December 2012

As 2012 draws to a close, and with the help of some industry leaders, we took a look back in a sense for the December issue of The Mortgage Observer. For starters, October 2012 saw Starwood Property Trust close its largest loan to date. The real estate investment trust issued a $475 million loan for the acquisition and development of the Times Square Gateway at 701 Seventh Avenue.

Alessia Pirolo got to know the close-knit team from the REIT that worked on the Times Square deal. The bulk of the team has worked together for years now—and they were on the forefront of early securitization, dating back to their work at Nomura.

For the Q&A this month, I got to sit down with Jay Neveloff, a partner at Kramer Levin, who gave me his take on how his

roster of clients is reacting to election results. Development is continuing, he told me, though he said that clients were busy trying to close sales by the end of the year to head off potential changes to capital gains taxes.

With the elections in the rear-view mirror, we also wanted to hear from someone with a broad view of the lending market—and the Commercial Real Estate Finance Council’s Stephen Renna was just the person. Mr. Renna, CEO of the organization, goes into great detail about how the election and looming regulatory changes are weighing on his membership.

So Long, 2012

TMO.1212.EditorsLetterCS3.indd 2 11/29/12 5:37:28 PM

© 2012 Wells Fargo Bank, N.A. All rights reserved. Member FDIC. ECG-743270

Thank you to our customers and team members who have donated more than �� million to the Red Cross at Wells Fargo ATMs across the nation. In addition to the �� million that Wells Fargo donated on October ��, we’re also offering emergency loan assistance; mortgage customer assistance; a waiver on ATM fees in affected states; small business lines and loans; and waivers on merchant service fees.

If you are an affected Wells Fargo customer and need assistance, please call �-��-TO-WELLS (�-��-��-��) �� hours a day, seven days a week, or visit us at any Wells Fargo store. We’re here to help.

Thank you to our customers and team members.

Your donations of more than �� million in the days since Hurricane Sandy are making a difference. They say, “We want to help.” “You’re not alone.” “We care.” You’re giving those affected a place to rest, a hot meal, warm clothing. Your generosity says, “hope” loud and clear. And we say, “thank you.”

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4

SpotlightNews Exchange / December 2012

Wells Fargo Closes $621.5 Million Co-op City Refi

» The Bronx’s Co-op City has been refinanced in a $621.5 million loan that is the largest ever in-sured under Housing and Urban Development’s 223(f ) program. Wells Fargo provided the loan to RiverBay Corp., the company that manages the 15,000 unit, 330-acre site.

Alan Wiener, group head at Wells Fargo Multi- family Capital, had been working on the transac-tion for quite some time, having told The Mort-gage Observer that it was in the works in April. With it now closed, he said that he is pleased with the final result.

“It’s a 35-year, self amortizing mortgage—un-der 3 percent,” Mr. Wiener said. “The units have to stay affordable unless they want to pay off the HUD loan, which they’ll never do.”

Proceeds will be used to prepay the current

mortgage and finish some capital improvement projects there. Mr. Wiener said that the histori-cally low interest rate environment allowed the refinancing to save Co-op City more than $150 million, as opposed to seeing out the previous loan, which had 14 years remaining.

Co-op City is truly a veritable city on its own—with three shopping centers, eight parking garag-es, three elementary schools, two middle schools, a high school, a power plant and 12 churches. It’s home to 55,000 residents. Gov. Andrew Cuo-mo referenced this fact in a statement about the deal.

“If it were an actual incorporated city, Co-op City would be the 12th largest in our state,” Mr. Cuomo said. “It is hard to exaggerate the criti-cal role it has played for over 40 years in keeping

Co-op City

housing in New York State and New York City affordable.”

HUD’s 223(f ) program is designed to protect lenders from losses resulting from multifamily property mortgage defaults, but this is the first time that it has been applied to a co-op devel-opment. Credit support is being provided in the form of $55 million from the State of New York Mortgage Agency’s Mortgage Insurance Fund and $15 million from New York City’s Housing Development Corp.

“Not only have we helped make it possible to raise the cash to complete essential renova-tions at Co-op City, we are saving the co-opera-tors more than $150 million in debt service over the next 10 years, allowing then to fund addition-al rehab projects as they become necessary,” said HDC President Marc Jahr. “This is a benefit that yields immediate results and will continue to pay forward over the long term.”

The largest Mitchell-Lama co-op, the sprawl-ing housing complex first opened in 1968.

This financing comes on the heels of many other affordable housing transactions that Mr. Wiener has worked on in the city. In 2009, Wells Fargo originated a $531 million Freddie Mac loan to refinance Brooklyn’s Starrett City, keeping nearly 6,000 housing units affordable for anoth-er 30 years.

Prices for non-performing and impaired-per-forming commercial real estate loans traded at DebtX gained in October, continuing a several-months-long trend. This, according to DebtX-Data—the proprietary analytics platform of the Boston-based largest marketplace for loans.

“The primary story of the year has been the im-proving of the real estate capital markets in gen-eral,” DebtX Managing Director Will Mercer told The Mortgage Observer. People are back to aggres-sively purchasing, he added, both in the primary and in the secondary loan markets. “In the sec-ondary market, there are still people with plenty of money looking to purchase loans,” Mr. Mercer added.

He pointed put that even if the increase from

Industry research

Loan Prices Continue Upward Swing

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TMO.1212.NewsExchangeCS3.indd 4 11/29/12 5:39:14 PM

5

December 2012 / News Exchange

July 1942The Greenwich Savings Bank provides a $76,500 loan on a property at 48-50 47th Street. The borrower is 50 West 47th Street Corp., whose president is recorded as Samuel Geller. In the early 1980s, the Greenwich Sav-ings Bank would experience big losses, and in 1981 it would close.

June 1974East River Savings Bank provides a $225,000 loan to 50 West 47th Street Corp. Samuel Geller dies in September of the same year, and his heirs would sell the property to Midtown Jewelers Realty in 1979. The troubled East River Sav-ings Bank would be acquired by ADCO in 1985, and its holding company, River Bank Ameri-ca, would sell its banking branches to HSBC in 1996.

OctOber 1996 Midtown Jewelers Realty obtains a $575,000 loan on the property from the Merchant Bank of New York. The bank would soon assign the loan to Republic National Bank of New York—later acquired by HSBC.

2006-2009 Extell Development Company buys 48-50 West 47th Street and other parcels on the same street to develop its International Gem Tow-er. The mortgage with HSBC is terminated.

Extell obtains a mortgage from CapitalSource, which is consolidated from $63 million in 2006 to over $168 million in 2009.

September 2012Extell closes on a $300 million senior con-struction loan for its International Gem Tower, a commercial condo designed by architecture firm Skidmore, Owings & Merrill. The lender is Deutsche Bank. Another $100 million in sub-ordinate debt is in the works.

On the Gem Tower’s SiteFrom the vaultmonth to month can seem slow, looking at the

data from year to year, the pricing increase has been constant.

DebtX reports that the estimated price of whole loans securing the U.S. commercial mort-gage-backed securities universe increased to 88.9 percent in October 2012, up from 88.7 per-cent in September, an improvement from the previous month, when the price remained the same. By comparison, loan values were 85.3 percent in October 2011. As of October 31, 2012, DebtX had priced 54,825 commercial real es-tate loans, with an aggregate principal balance of $765.5 billion.

The weighted average monthly price of im-paired performing loans traded at DebtX’s mar-ketplace was 79.4 percent in October 2012, up from 78 percent in September. Prices were 70.8 percent in October 2011.

The weighted average monthly price of non-performing commercial real estate loans trad-ed in the DebtX marketplace was 51.9 percent in October 2012, up from 50.9 percent in Sep-tember and up from 40.3 percent in October 2011.

The Loan Liquidi-ty Index, a monthly ba-rometer of liquidity for pools of loans sold at DebtX, was 108.4, down from 109.5 in Septem-ber. The index was 93.6 in September 2011.

“Loan prices rose again in October due to the continuing recovery in the commercial real estate capital markets,” Mr. Mercer said, adding that “steady demand for product from a broad range of investors” had boosted the prices as well.

“Looking back at the last 12 months,” he add-ed, there has been “a fairly stable increase.”

The increase is expect to continue and even to accelerate in the last part of the year. “The fourth quarter in general is one of the busiest moments of the year, in our market,” explained Mr. Mercer, pointing out that there are “a lot of lenders who are looking to move non-perform-ing loans off the books,” and to “lower their ex-posure to mortgages.”

48-50 47th Street, then

48-50 47th Street, now

Got a news tip? email Alessia pirolo at

[email protected] or call (212) 407-9308.

88.9%reported

increase in price of whole loans

securing the u.S. commerical

mortgage-backed securites

universe


6

News Exchange / December 2012

ACROSS THE COUNTRY

$2 Billion

Eight Malls in New Jersey, Nevada, Arizona, Utah, Texas, California and Floridaowner: General Growth Properties lenders: Wells Fargo, UBS and Barclays, among others

General Growth Properties, the owner and manager of 144 regional shopping malls throughout the Unit-ed States and Brazil, recently closed over $2 bil-lion of property-level financings for eight malls. The transactions take advantage of the current compet-itive interest rates.

$250 million

540 West Madison Street, Chicago, Ill.owners: David Werner and Joseph Mizrachilender: Deutsche Bank

$126 million

100 Montgomery, San Francisco, Calif.owner: Blackstonelender: Starwood Property Trust

$96 million

311 Putnam Green and 219 Weaver Street, Green-wich, Conn.owner: LCOR lender: Allianz Real Estate of America

IN NEW YORk

$950 million

1290 Avenue of the Americas owner: Vornado Realty Trustlenders: Deutsche Bank, Goldman Sachs, UBS Se-curities and Bank of China

This new piece of financing is a 10-year interest-on-ly loan with an interest rate of 3.344 percent. After closing costs were paid and the existing loan repaid, proceeds were roughly $522 million. Vornado owns a 70 percent controlling interest in the 43-story, 2-million-square-foot building, which is currently undergoing upgrades to its lobby and other areas.

$300 million

International Gem Tower Borrower: Extell Development lender: Deutsche Bank

$280 million

616 units at Riverside Center Borrowers: Carlyle Group, Dermot Companies, the AFL-CIO Building Investment Trust and Greenfield Partners lenders: Capital One Bank and Bank of America

$275 million

575 Lexington AvenueBorrowers: New York Life Insurance Company and an investor group led by Normandy Real Estate Fund IIIlenders: CIBC, Bank of America, Royal Bank of Can-ada and Blackstone Group

$223 million

Portfolio of 10 properties in Manhattan, Brooklyn, the Bronx and Westchester County, including Em-bassy House at 301 East 47th Street Borrower: Stellar Group lender: New York Community Bank

The Largest Loans of the MonthLaunched at the beginning of November, our new,

weekly email newsletter Mortgage Observer Weekly has already reported on huge transactions all across the country. The perfect companion to The Mort-gage Observer magazine, the newsletter gives read-ers the latest transaction news, informative charts, Q&As and more.

To receive a trial subscription to the mortgage observer Weekly, please visit

commercialobserver.com/ mortgage-observer-weekly-signup

Sam Zell Equity Residential agrees to $6.5 B. Archstone buy, ending protracted back and forth about Lehman Brothers Holdings’ apartment portfolio.

Sprawling, Bargain Shopping DeStinationS Refis, including several mentioned in these pages, cause minivan set to rejoice.

mixeD-USe BUilDingS FHA rule change is game-changer, paving the way for condos in mixed-used buildings, The New York Times reports.

Starrett Corp. Developer faces $55 million foreclosure suit—filed November 20 in New York State Supreme Court.

BeSt BUy Big-box retailer continues to struggle to find its way, with dismal Q3 results that included a 97 percent drop in operating income and a drop in same-store sales. Happy holidays? Maybe not.

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8

In-Depth Look / December 2012 A comprehensive take on CRE finance trends

by Michael Stoler

Everyone wants to operate a business in New York City. Companies from around the world travel to the Big Apple to expand their

presence in the global market by staking out space here.

While the costs of operating a business in the city and in the region can be astronomical, the rewards can make it well worth it. So despite the challenges, each year a number of financial institutions from around the globe decide that it’s time to expand in New York in order to capitalize on companies’ desires to open shop or expand their operations here. As 2012 draws to a close, a number of new entrants from regional and national banks are elbowing in to gain market share in the New York tristate area by offering financing for commercial real estate. That means new hires.

Herald National Bank, a subsidiary of Bank United, is slated to become Bank United on February 1, 2013. Over the past few months, a number of former North Fork commercial lenders have joined the ranks of new employees at Herald National Bank. November 12, for instance, was the first day of employment in the New York City office of Herald National for Paul Leprohon, a former North Fork Bank employee. Mr. Leprohon joins Paul Breuer there, who is based in Melville, Long Island. Both spent many years working together at North Fork and at Chase Manhattan Bank. They’ll both be working with the chairman and vice chairman of Bank United—John Kanas and John Bohlsen, respectively—who are both formerly of North Fork.

Banco Popular is a $37 billion holding company based in Puerto Rico. Over the past few years the bank has been rebranding itself in the U.S., shifting to become a community bank. In June of this year, it changed the name of its New York City

operation to Popular Community Bank. The bank was an active lender in providing

construction and real estate financing, but the combination of the recession and economic crisis of 2008 caused it to scale back its exposure in this market.

This summer, Sophia Haliotis joined as a senior vice president for the $8.7-billion-asset Popular Community, the U.S. unit of Popular. She joined the bank to lead the commercial banking and real estate team’s expansion in the retail, industrial, multifamily apartment and nonprofit refinancing sectors.

“Currently, the bank is refocusing on growing its commercial real estate book as well as its overall commercial lending,” Ms. Haliotis said, adding that the growth is expected to come as a result of a new initiative in multifamily lending.

In July of this year, Hudson City Bancorp announced that it will enter the lucrative commercial real estate market, initially participating in syndicated commercial real estate and multifamily mortgage loans. Then, on August 27th, M&T Bank Corp. agreed to buy Hudson City Bancorp for $3.7 billion.

With the acquisition, M&T Bank will expand its presence in providing commercial real estate and middle market financing to companies in markets where Hudson City has an extensive branch network.

TriState Capital Bank provides commercial and industrial banking, commercial real estate lending and private banking services for middle market businesses. The bank was founded in 2007 and is based in Pittsburgh. This past summer, it opened its New York City location at 623 Fifth Avenue. In August, the bank announced the hiring of Thomas Gilmartin to serve as regional president of the company’s New

York City market. TriState Capital Bank President William Schenck

III, commenting on growth and expansion plans, said that the “bank’s focus is serving middle market businesses with revenues in the $20 million to $200 million range and high-net-worth individuals.” He added that the bank is “excited about now being part of the New York metropolitan market.”

Before the end of the year, People’s United Bank is expected to open its flagship New York City branch at 250 Park Avenue. In July, the bank announced that John Costa had joined its commercial banking group as executive vice president and head of the New York commercial real estate business.

“We are pleased to have John join us to grow our lending activities in the metro New York market,” said Jeffrey Tengel, senior vice president, commercial banking. In addition to the hiring of Mr. Costa, the bank hired two other senior lenders from Santander specializing in multifamily financing.

Minneapolis-based U.S. Bancorp, with $352 billion in assets, is the parent company of the fifth-largest commercial bank in the United States—U.S. Bank National Association. Over the past decade, it has provided financing for commercial real estate for private investors, real estate investment trusts and private equity funds. Earlier this year, the bank hired Gregory Fierce to oversee the loan production and originations in New York City. “I joined the bank to focus more on the New York City marketplace,” Mr. Fierce said. “With that groundwork laid in 2012, we plan to expand our portfolio further in 2013.”

California-based First Republic Bank is also expanding its presence in the New York tristate area. Last December, the leading private bank and wealth Management Company announced that

Garrett Sokoloff had joined as a managing director in New York City. Mr. Sokoloff

had worked for UBS as the co-head of conduit origination in the real estate finance group. Over the past year, his team has become a major force in providing commercial real estate financing in the region. With these new hires all poised to

take advantage of growth in the New York area in the new year, banks from all across the

country appear ready to go.

New Hires Signal Banks’ Growth Heading Into New Year

TMO.1212.CS3.InDepthLook.indd 8 11/29/12 5:38:23 PM

COMMERCIAL REAL ESTATE FINANCE

FINANCINGAMERICA’S

FUTURE

The Crossing at Barry Road Kansas City, MO

$43,640,000

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A

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10

Scheme of Things / December 2012 Monthly charts of commercial real estate financings across New York City

The Mortgage Observer’s charts for September and October show that Brooklyn remains at the top of the financing heap—with financings along the waterfront in Williamsburg and in the Gowanus neighborhood leading the way. October’s activity was down, but experts, like Kramer Levin’s Jay Neveloff (see page 28) have said that fears over increasing capital gains taxes could fuel year-end sales.

Mortgage Charts

475297

12381

Overall, both purchases and refinances dropped from September to October 2012. The trend has been down-ward for the past several months, in fact.

SEPT OCT

REFINANCES SEPT OCT

PURCHASES

For the months of September and October, the top three lenders remained unchanged, with New York Community Bank, Signature Bank and JPMorgan Chase all retaining their spots. As Michael Stoler reports in In-Depth Look on page 8, there are many banks trying to elbow in on the New York City market in the new year.

Refinances vs. Purchases

Top 10 Lenders

Sales across each of the four boroughs that we study were down in October from the previous month, with Brooklyn seeing the sharpest drop—nearly cut in half.

Total Sales by Borough

Brooklyn’s Gowanus neighborhood, where the Lightstone Group’s development plans have pitted neighbors, the developers and the area’s Gowanus Canal Community Development Corp. against one another, was among the neighborhoods leading financing activity.

SEPT OCTALL

SEPT OCTMAN.

SEPT OCTBRONX

SEPT OCTBROOK.

SEPT OCTQUEENS

BANK SEPTEMBER 2012 BANK OCTOBER 2012

255

57

27

112

59

160

4125

5737

Most Active ZIP Codes – Financing

New York Community Bank 49 New York Community Bank 41

Signature Bank 49 Signature Bank 33

JPMorgan Chase 37 JPMorgan Chase 26

Astoria Federal Savings Bank 30 Dime Savings Bank of Williamsburgh 19

Dime Savings Bank of Williamsburgh 24 Flushing Savings Bank 15

Sovereign Bank 15 Capital One 13

Capital One 12 Valley National Bank 10

NCB 12 United International Bank 10

M&T 12 Astoria Federal Savings Bank 10

New York Commercial Bank 11

ZIP CODE SEPT 2012 ZIP CODE OCT 2012

11211 34 A 11215 13

11237 15 B 10003 11

10019 15 C 11211 11

11222 13 D 11205 10

11356 13 E 11354 10

11238 11

How Sweet It Is: One of the top locations for financings during the month of October 2012 was Williamsburg,, boosted by the sale of 264-350 Kent Avenue. The site, better known as the Domino Sugar Factory, had been the subject of months of legal wrangling, but in the end was sold toTwo Trees Management Co. for$185 million. Facilitating the sale was a $94 million loan that closed in the middle of the month from M&T Bank and syndicated at closing with Wells Fargo. Residential development is planned.

B

Source:

TMO.1212.CS3.SchemeOfThings.indd 10 11/29/12 5:41:13 PM

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12

The M.O. Columnists / December 2012

Stein’s Law

Joshua Stein

Everyone familiar with mezzanine loans knows a mezzanine lender can realize on the collateral for its loan much more quickly

than a mortgage lender can. But not too many people understand just how quickly and easily a mezzanine lender can do that—at least if the mezzanine borrower isn’t paying attention or if things otherwise go wrong for the mezzanine borrower.

Probably the most common security package for mezzanine loans consists of the equity interests in the mortgage borrower, or in some other entity that indirectly owns the mortgage borrower. Those equity interests are not real property. As a result, the Uniform Commercial Code, rather than real property law, will govern that security package. And the UCC gives every mezzanine lender that receives an equity pledge a potentially very powerful and quick way to get rid of the mezzanine borrower.

Specifically, if the borrower is in default, the lender can send the borrower a notice proposing that the lender retain the collateral, the equity interests. The borrower can reject that retention proposal, provided that the lender actually receives the rejection within 20 days after the lender mailed

Not So Fast! (The Mezzanine Loan Surprise)

the retention proposal. If that doesn’t happen, then the lender owns the equity interests. The borrower doesn’t. That’s it. And the mezzanine loan will be deemed paid in full. Legally, the process is called “strict foreclosure.”

At a minimum, the possibility of a strict foreclosure means that a borrower in default needs to keep its eyes open for a retention proposal coming from its lender. If such a proposal arrives, the borrower must realize what it is, then move quickly to send a valid notice to the lender rejecting it. If the borrower does that, then the lender’s gambit will fail and the lender will need to exercise its other rights under the UCC and the loan documents.

As a practical matter, any borrower ought to be able to protect itself from the strict foreclosure risk by paying

attention and acting on any strange notices that come from the lender. But things do go wrong. Notices do fall between the cracks. Letters do get lost or ignored—even important-sounding letters. Borrowers do relocate their offices and do forget to formally notify their lenders of their new addresses. If the loan documents identify a particular individual to receive notices, that person may leave the organization and the mailroom

might mishandle their mail.That is exactly what happened in one recent death

penalty case, in which the lawyers who represented the defendant, as a pro bono client, left their firm but remained the addressees-of-record for important notices. When a notice arrived that began the period to file an appeal, the mailroom didn’t handle it properly. The defendant missed his deadline to appeal. The federal appellate court refused to overlook the mix-up, and would have upheld the death penalty conviction as final. It took an appeal to the Supreme Court to reopen the matter and allow the appeal to proceed even though the defendant had missed his deadline only because of a screw-up in his former lawyers’ mailroom.

A borrower that doesn’t respond in timely fashion to a retention proposal might similarly persuade a court to protect the borrower after the fact, but also might not.

Because of concerns like these, a borrower could reasonably say that the whole strict foreclosure mechanism creates an unacceptable and unreasonable risk that the borrower will lose its entire investment because of some failure or hiccup in a process that moves blindingly fast when compared with the usual pace of real estate foreclosures. In other words, the mere possibility of a strict foreclosure, even if the borrower can probably stop it, creates a risk that the borrower might reasonably regard as inappropriate.

In real estate transactions, an investor isn’t supposed to be able to lose its investment as easily or quickly as strict foreclosure might permit—even if the borrower should be able to prevent the problem by paying attention.

A borrower concerned about protection from a strict foreclosure might reasonably ask the lender to agree not to exercise its strict foreclosure rights under the UCC. Nothing prevents a lender from making such an agreement. And a practical lender will probably accommodate the borrower’s request, recognizing that a retention proposal will ordinarily be futile and useless, because the borrower will probably pay attention and reject it. The only time a retention proposal helps the lender is when the borrower screws up. And that possibility hardly gives a lender a defensible basis to insist on retaining the right to send a retention proposal.

More generally, a borrower might want to have its counsel think about and try to trim back other lender rights under the UCC that may seem extreme and overly harsh if they ever become relevant. Strict foreclosure represents the beginning but not the end of that discussion.

Joshua Stein is the sole principal of Joshua Stein PLLC. The views expressed here are his own. He can be reached at [email protected].

TMO.1212.CS3.Columnists.indd 12 11/29/12 5:33:04 PM

13

December 2012 / The M.O. Columnists

The Basis Point

Sam Chandan

With few exceptions, news on the housing front has been overwhelmingly positive in recent months. In spite

of weak employment trends, historically low mortgage rates and the plodding but inexorable rebalancing of supply and demand have combined to lift sales volumes, prices and perceptions of a housing recovery.

But a rising tide does not relegate housing to a lower rung on the policy ladder. As conditions improve, policymakers will be obliged to address the long-term role of government in promoting specific housing outcomes. Since the government embarked on the conservatorship of Fannie Mae and Freddie Mac more than four years ago, the immediate goal of resuscitating the housing market has taken precedence over the larger question of how policy goals have supported—and undermined—the sustainability of the sector.

While the private sector is not ready to subsume the role of the agencies in secondary market-making, a serious debate over the eventual structure of housing finance is overdue.

The question may be forced as Congress and the administration begin their horse trading over durable solutions to the federal budget imbalance. In steering the optics between tax increases and the curtailment of deductions, the treatment of mortgage interest is almost certainly on the table, at least in relation to high-income earners.

A reconsideration of this mainstay housing subsidy will necessarily open the door on a wider discussion of whom the government should—and whom it need not—support.

If Congress does not bring the question of the government’s role in the post-crisis housing sector to the fore, other stakeholders will have the opportunity to raise their voices. Relating specifically to the enterprises operating under conservatorship, the Federal Housing Finance

Administration is an obvious candidate, since it has done so already.

As other sources of liquidity become available, the FHFA’s strategic plan points to a reduced presence for Fannie Mae and Freddie Mac. Conceding that no private secondary market could exist in our present circumstance, the FHFA’s plan also calls for a new housing finance infrastructure with a greater role for the private sector. But beyond that, the ultimate fate of the

enterprises rests with Congress.The Federal Housing Administration, which

boasts a 78-year history during which it has remained in the black, may be the proximate cause of a more vigorous debate over housing policy. Contrasting better outcomes in the sales data, the widely reported new audit of the FHA’s Mutual Mortgage Insurance Fund shows a loss of $16.3 billion for the fiscal year ending September 30, 2012. That is an actuarial measure, and the FHA is at pains to remind us that its needs will be

Challenges at the FHA Were Foreseen

quantified with the federal budget in February.In defending the FHA, a range of policymakers

will point out the enormous benefits of its activities; the housing downturn would have been even more severe in its absence. Through the mechanism of its guarantee, the FHA has played a significant role in supporting marginal households’ access to mortgages during the housing downturn. Nonetheless, the potential deployment of taxpayer dollars to prop up the venerable institution will serve as a lighting rod for policy conflict.

And so it should. As important a function as the FHA has served, the problems it faces now were both foreseen and avoidable. Capital was allowed to fall below the statutory requirement of 2 percent, in full view and knowledge of both the FHA and Housing and Urban Development.

Ramping up during the crisis, the FHA increased the MMI’s insurance-in-force from approximately $305 billion in 2007 to $1.1 trillion at the close of the 2012 fiscal year. Both historically and during the crisis, the vast majority of the insured mortgages had loan-to-value ratios of 95 percent or more. If we accept the premise that credit should be extended to a degree that credit is due, this seems at odds with basic lessons in risk management that are the financial crisis’s teachable moment.

Irrespective of any policy motivations that might override the judicious handling of taxpayer commitments, the meat of the problem is in the FHA’s capital reserves, not its direct support of the market. One year ago, in a paper from Wharton Real Estate Chair Joe Gyourko and the American Enterprise Institute, Professor Gyourko pointed out that “for the past two years, [the FHA] has been in violation of its most important capital reserve regulation, under which it is supposed to hold sufficient reserves against unexpected future losses on its existing insurance-in-force.” This was not the first warning of the FHA’s riskier overall position, though it did elicit a visible rebuke.

Among its explanations for why it is a less risky institution today, the FHA points out that its newer book of business measures favorably and that the actuarial assessments capture issues relating to legacy loans. Be that as it may, there are fundamental questions of housing policy that arise when the government guarantees high-leverage mortgages and allows its institutions to breach their statutory limits. These are policies and policy choices that now define housing in the United States and that must come under much greater scrutiny.

Sam Chandan, Ph.D., is president and chief economist of Chandan Economics and an adjunct professor at the Wharton School. The views expressed here are his own. He can be reached at [email protected].

TMO.1212.CS3.Columnists.indd 13 11/29/12 5:33:16 PM

selection and economic returns of the com-pany over the past few years. We are confident that this bifurcation of duties will best serve all investors, both in Two Harbors and Pine Riv-er,” stated Thomas Siering, president and chief executive officer of Two Harbors. “Bill and his team will continue to draw upon the extensive capabilities within Pine River, the external manager of Two Harbors, including close collaboration with Steve and the rest of the Pine River mortgage team.”

Gleacher & Company Securities, a broker-dealer subsidiary of Gleacher & Company, announced that Brendan Keane and Robert Miller will be joining the firm as managing di-rectors in the MBS and rates division.

“We are pleased to welcome Brendan and Robert, and we are confident that they will con-tribute to the growth and success of Gleacher & Company. Both Brendan and Robert are inno-vative practitioners with diverse experience in trading, structured finance and advisory that will be invaluable to Gleacher & Company and our clients,” said George Smith, a managing director and head of the MBS and rates trading division.

Their roles will focus on structured products within the division.

“We continue to grow our core competen-cies, capitalizing on hiring opportunities in the mortgage-backed securities and credit mar-kets,” added CEO Thomas Hughes.

Eugene Reilly has been named chair-man of the Board at NAIOP, the Commer-cial Real Estate Devel-opment Association, for 2013. He follows the association’s 2012 chairman, William

Hunt, who is president and CEO of The Elmhurst Group.

“NAIOP is privileged to have Gene leading the association next year as corporate chair-man,” said NAIOP President and CEO Thomas Bisacquino. “His wealth of leadership experi-ence in the commercial real estate industry, our association and his local community will prove invaluable as he connects with our local chapters and guides the organization’s vision forward into 2013.”

Mr. Reilly is CEO for the Americas for Pro-logis, a San Francisco-based provider of logis-tics and distribution facilities.

The CCIM Insti-tute announced at its annual conference in Las Vegas that Wayne D’Amico would serve as its president for 2013.

Mr. D’Amico has an extensive history on CCIM’s executive leadership team, serving on various levels in state and regional chapters.

“I’m thrilled to welcome Wayne to the 2013 executive leadership team,” said Hank White Jr., executive vice president and chief exec-utive officer of the CCIM Institute. “Wayne brings more than 25 years of commercial real estate experience to his new role, along with a great desire to help CCIM achieve quantifiable success around each of our three pillars: net-working, education and technology.”

The Financial Ac-counting Foun-dation, the parent organization of the Financial Account-ing Standards Board and the Governmen-tal Accounting Stan-dards Board, has elected Jeffrey Dier-meier as chairman of its board of trustees.

“Jeff Diermeier is a highly regarded inves-tor who has successfully overseen the manage-ment of hundreds of billions of dollars in assets over many years and is especially well qualified to lead the FAF board of trustees,” said John Brennan, his predecessor and chairman emer-itus of the Vanguard Group.

Prior to his involvement on the Financial Accounting Foundation board, Mr. Diermeier was the president and chief executive office of the CFA Institute. He has also worked at UBS Global Asset Management, overseeing more than $400 billion in assets.

Two Harbors Investment Corp. has named William Roth as chief investment officer.

Mr. Roth has shared the role as co-chief in-vestment officer with Steven Kuhn for the past three years, but Mr. Kuhn will be focusing on his role with Pine River Capital Management.

“We are delighted to congratulate Bill on his appointment as CIO. This is a natural transi-tion for Bill and Steve, as Bill and his team have been instrumental to the superior security

Prudential Mort-gage Capital Compa-ny has promoted Hal Collett to president of Prudential Asset Re-sources, based in Dal-las, Texas. Mr. Collett replaces Catherine Rodewald, who will re-tire at the end of 2012.

Mr. Collett joined PMCC in 2002 and has served in a variety of different roles at Pru-dential Asset Resources—most recently as vice president of asset management and credit surveillance.

In his new role, he’ll be responsible for servic-ing and asset management operations associat-ed with PMCC’s portfolio of commercial real estate loans—which is valued at $69.42 billion.

“We are excited to have an executive with the breadth and depth of Hal’s experience to lead Prudential Asset Resources,” said PMCC Presi-dent David Twardock. “Our clients can expect the same superior-quality service they have come to expect from Prudential under Hal’s ca-pable leadership.”

Four Springs Cap-ital Trust, a New Jer-sey-based real estate investment trust, has named Cynthia Mor-genstern Daly as di-rector of acquisitions.

“Four Springs Cap-ital Trust is at an im-portant inflection point in its growth,” said Ms. Daly about the timing of her hire. “I believe that the company has tremendous opportunities for growth and will become a leading single-tenant net leased REIT. I look forward to contributing to FSCT’s future success.”

Ms. Daly’s role at the company will include executing the company’s national growth strat-egy, sourcing and screening investment oppor-tunities, underwriting property acquisitions and presenting investment opportunities to the REIT.

She previously served as the executive vice president and director of Monmouth Real Es-tate Investment Corporation.

14

Work Force / December 2012 Hirings, promotions, defections and appointments

Changed jobs recently? Heard of a move?

Email [email protected] to be featured in Work Force.

Hal Collett

Jeffrey Diermeier

Wayne D’Amico

Cynthia Daly

Eugene Reilly

TMO.1212.WorkForceCS3.indd 14 11/29/12 5:42:41 PM

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This past October, after three and a half-weeks of negotiations, Starwood Property Trust and a fund controlled by Starwood

Capital Group originated the REIT’s largest transaction so far—$475 million in combined acquisition and construction financing for a joint venture to develop Times Square Gateway Center a 340,000-square-foot multi-use complex in the busiest area of Manhattan.

After a run of about three years, Starwood Property Trust, which real estate investor Barry Sternlicht took public in August 2009, has “entered the big league,” as FBR Capital Markets analyst Gabe Poggi wrote in a report after the release of the REIT’s third-quarter 2012 results.

The country’s largest commercial REIT, with a market capitalization of $3.1 billion as of November 6, closed $599 million in new investment in the third quarter and an additional $482.3 million of

new investments since October, with many more in the pipeline due to close by the end of the year.

There are at least two very powerful “secret weapons” behind these results, it emerged from a series of interviews the members of the executive team running Starwood Property Trust had with The Mortgage Observer.

First, the REIT benefits from “major synergy between the Starwood Capital Group equity team and the debt team of Starwood Property Trust,” said Mr. Sternlicht. This synergy was fully employed in the Times Square Gateway Center deal, which was sourced and closed by Marcos Alvarado, a senior vice president at Starwood Capital Group and a fast rising young star on its acquisitions team.

Starwood Property Trust’s other ace in the hole is an executive debt team that has been together for almost two decades—through all the ups and downs that commercial real estate finance has seen in that period.

President Boyd Fellows, Chief Financial Officer Stew Ward, Chief Credit Officer Chris Tokarski

18

Power Profile / December 2012

STARWOOD PROPERTY TRUST

by Alessia Pirolo

Debt PioneersThe lending team at Starwood Property Trust is the REIT's secret weapon. Here's why.

TMO.1212.CS3.POWERPROFILE.indd 18 11/29/12 5:49:25 PM

19photos by will o'hare


and Chief Originations Officer Warren de Haan were hired by Mr. Sternlicht in October 2010 to form the executive team of the REIT, along with Chief Operating Officer and General Counsel Andrew Sossen—who had been hired in 2009.

The team’s story dates back to the origins of the CMBS market. “We’ve been together for an incredibly long time—we act as a team,” Mr. Fellows said. He estimated that the team has closed roughly 5,000 mortgages in its entire history together.

After years of shared careers and lives, the team’s bond goes well beyond its professional relationship.

“Ultimately,” said Mr. de Haan, “we love working together. We trust each other implicitly, and as a team we are stronger than we are individually.”

Mr. Fellows and Mr. Ward were the first to meet, back in 1983. Originally from St. Louis and Denver, respectively, the pair were just out of their M.B.A. programs and had landed jobs in the treasury department at Bank of America in San Francisco.

Both outdoorsmen, location was a key factor for them in those early job decisions.

“Both of us were interested in jobs pretty much only in San Francisco or Denver,” Mr. Ward remembered. “Places where you could ski and ride.”

The group still pursues a shared passion for outdoor sports, which was among the reasons for choosing California as a base, though, in fact, the team is spread across multiple locations. Mr. Fellows, Mr. Ward and Mr. Tokarski are based in San Francisco, Mr. de Haan is in Los Angeles and Mr. Sossen commutes between his Upper East Side home and the Starwood office in Greenwich, Conn.

Messrs. Fellows and Ward’s work in real estate lending began at Morgan Stanley. From there, they moved to Nomura in the early 1990s, where they were among the pioneers of the CMBS market.

Being a pioneer meant all the attendant room for creativity while developing those early sophisticated structures. “It was like the Wild West,” Mr. Fellows asserted, speaking in a New York café on a snowy morning in early November, just before hopping a plane back to San Francisco. “We brought a huge amount of what I would

call science to the process, in a real estate world that had never experienced this kind of rocket-science-based lending.”

“We invented a lot of structures,” Mr. Ward said a few days later, as the entire team met in New York for a busy schedule of meetings. “Simple things that today people don’t even think twice about.”

For example, the notion of defeasance to pay off the mortgage early, he said, was “something that Boyd thought [up] on his own.”

Mr. Fellows was one of the key senior executives who led Nomura’s CRE division and helped grow it from just 12 employees to 450. The partners

call Mr. Ward “a quantitative genius” or “a legend,” who is credited for many of the structural innovations that shaped the securitization of commercial real estate debt in the 1990s.

“It was the right time and it was the right place. The group was built very rapidly but was built with some of the smartest people that I’ve ever met and worked with,” said Mr. Tokarski, who joined Nomura’s CRE division in 1995 and, as a director, ran the commercial mortgage underwriting and securitization group. Originally from New Jersey, Mr. Tokarski earned a B.A. from Brown University, where he had distinguished himself in wrestling. His partners said this activity prepared him for his current role as a credit officer, negotiating with originators and borrowers.

However, the Nomura experience came to an abrupt end when the 1998 Russian debt crisis led to an almost overnight collapse of the CMBS market. Following huge losses, the Japanese bank exited the commercial real estate lending market.

“We were fully aware of the risks that we were taking, and we had full support from the management of the firm, but there was no derivative markets per se and there was no way to hedge that exposure,” Mr. Ward said. Five years later, when the team started a CRE lending platform at Countrywide Financial Corp., it remembered lessons learned from Nomura. “We took an incredibly disciplined approach to hedging and risk management, and I think we were arguably the only major CMBS player that didn’t lose a penny during 2007 and 2008,” Mr. Ward added.

In the meantime, the team had added a new member. Born and raised in South Africa, Mr. de Haan graduated from the Hotel Institute

Montreux, in Switzerland, where he met his Italian-born wife. He worked in hospitality in London before moving to the U.S. to attend the Cornell University School of Hotel Administration, where he studied real estate and finance. His first job in CRE finance was at Nomura’s New York-based large loan team.

When the division moved to California, he recalled, “Chris, Boyd and Stew were already in San Francisco, and we became very good friends.” Once again, skiing and mountain biking helped cement professional relationships into friendships.

When Nomura shot down its CRE lending division, it seemed fate was pulling them back to New York. “We decided we didn’t want to leave the West Coast and go back to New York,” said Mr. de Haan. “This is when we hooked up together and we did a lot of advisory work.” Even for Mr. Tokarski, at the time the group’s only East Coast native, relocating was not a question. “I moved out to California and I love it,” he said. “I’ll never come back.”

By then it was evident that the quartet’s skill sets created a complementary and powerful team. “When we talked about going to Countrywide, we viewed it as a very good opportunity for us to use our combined experience, relationships and skills to build a very scalable business,” Mr. de Haan said of the group’s decision to head to the company in 2004.

All four initially joined Countrywide as executive vice presidents. Mr. Fellows was on the management team that founded and built Countrywide’s commercial real estate business, Mr. Ward was responsible for all capital markets activities and risk management, Mr. de Haan oversaw national originations and Mr. Tokarski was chief credit officer.

“We built Countrywide's commercial real estate business from scratch,” Mr. Fellows said of the division that became one of the largest in the United States, closing over 100 loans a month at its peak. “One thing we always brag about is that we are the only CMBS team on the entire planet that didn’t lose money in 2007 and 2008,” he added, echoing Mr. Ward’s sentiment.

Nonetheless, with the financial crisis, Countrywide Financial was sold to Bank of America in 2008, and the CMBS team was let go. “It happened to a lot of firms at the time,” said Mr. Fellows. “We went back to start our own business again—Coastal Capital.”

The team could have gone ahead with its own business, but around the same time, Mr. Sternlicht was making moves in the commercial real estate lending market. In 2009, he launched Starwood Property Trust, a publicly traded investment bank that invests in and originates commercial real estate

20

Power Profile / December 2012

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December 2012 / Power Profile

debt. Its initial public offering raised $950 million.Mr. Sternlicht had known Messrs. Fellows and

Ward since 1994, when Nomura provided the financing for his $561 million acquisition of the Westin Hotel Co. from Aoki Corp.

On a recent phone call with The Mortgage Observer, Mr. Sternlicht recalled that he had once worked on a hotel financing transaction with Mr. de Haan. Mr. Tokarski, meanwhile, was on his radar as a fellow Brown University alumnus. “They were very well-known in the debt space,” Mr. Sternlicht said, noting that the group’s cross-country lending relationships made it a good fit for the REIT.

“He raised the capital, but he needed a team. We were a team, but needed the capital,” Mr. Fellows said. “I can’t remember how many people he hired at the one time, but probably about 15. And—bam!—that was able to turbo-charge the REIT, which grew much more quickly and handled many more transactions.”

Once at Starwood Property Trust, the debt team acquired its fifth member. Originally from Upstate New York and with a law degree from the University of Pennsylvania, Mr. Sossen had primarily practiced mergers and acquisitions and securities law in New York for almost six years. Since 2006, he had been general counsel for the REIT KKR Financial Holdings, based in San Francisco. In 2009, Mr. Sossen heard through the grapevine about a position with Starwood Property Trust’s senior management team. “I flew to Greenwich to meet with Barry [Sternlicht], and four to six weeks later I quit my job and I was moving back to New York. Barry is a pretty persuasive,” Mr. Sossen said. “I got very intrigued, because it was never the understanding that this was going to be a small little player. This was going to be a significant player in the real estate finance industry—a big operating company.”

The original four members of the team agree that Mr. Sossen’s strong corporate background added a lot. “It can be very difficult and quite intimidating having four guys who have worked together for such a long time coming in as your partners,” Mr. de Haan acknowledged. “But Andrew had a very open mind when we came in, and accepted very well the fact that we have so much history together.”

A self-defined East Coast guy, Mr. Sossen said that living in New York cuts down on his ability to ride and ski. But when they are all in the same city together, the five will get together for dinner or drinks.

At work, the roles are well-defined. “I handle anything legal, capital market activity, raising capital, interacting with the Street—everything kind of M&A or strategic,” Mr. Sossen said, rattling off team members’ various strengths. “Chris is a phenomenal credit mind—all deals run through him. Warren knows everybody there is to know in the real estate business—he has a call in to every borrower. Stew is wickedly smart. He brought a quantitative approach

to the business that wasn’t here prior his arrival. Boyd is a great partner and face for the organization. Warren and Boyd as a team going to meet potential borrowers is a pretty deadly combination.”

But just as important as the debt team’s relationship is its synergy with the equity team at Starwood Capital Group. “What makes the REIT truly unique is that we have excellent debt skills and excellent property-evaluation skills,” Mr. Sternlicht asserted.

The deals over $125 million have to be approved by Starwood’s board, and the investment committee consists of an equal number of equity professionals and debt professionals. “It’s a huge strategic advantage, the Starwood equity guys understand the equity risks really well in this market,” said Mr. Fellows. “We go back and forth with them getting their input on the lending, how to structure the loan and how to make sense. It’s a really powerful synergy. But that’s easy to say. At the beginning, you have to get everybody to start to trust and respect each other and work together and feel good with each other. That integration process took time. Now, the morale is great and people work together very well, and it feels like a cohesive machine.”

In one of the most recent examples, in early November 2012, Starwood Property Trust originated a $126 million first mortgage and mezzanine loan on 100 Montgomery, a 25-story building in San Francisco, which Blackstone had just bought. While the building was on the market, Marc Perrin, Starwood Capital Group’s managing director who supervises the investments on the West Coast, had visited the property, done the underwriting and come to know it intimately. “When the deal was ultimately awarded to Blackstone, we called Marc and had a discussion with him about the building,” said Mr. de Haan. “We closed the deal in 25 days.”

Mr. Sternlicht said that he often sources the transactions and then puts the deal in the hands of the debt team, with which he stays in constant contact. He added that they are currently working on large transactions in New York that could close by the end of the year.

“We have another approximately $500 million [of new investments] in due diligence now,” said Mr. Fellows. “As we have grown and become bigger, we have become able to take down large complicated transactions in which we rarely have any competitions.” Compared with banks and insurance companies, which often co-originate the loans, Mr. Fellows added, Starwood Property Trust has the ability to be the only lender on large

and complex deals and to make the negotiation process more simple and certain. “We’ll just say [to the borrower], ‘We’ll take the all thing, simple, with no noise. You don’t have to talk to all these people. One contract. Done.”

“We are on everybody’s short list of lenders,” added Mr. Sossen. “We’ve proved that we can transact quickly, we can underwrite complex situations—and when we say that we are going to close, we are going to close, and I think borrowers appreciate that certainty.”

“We’ve been successful because we have been transparent with our shareholders, have laid out a clear plan as how we wanted to grow the business and haven’t deviated from that plan. And I think shareholders appreciate that transparency and predictability, which is what we have really delivered over the past three years.”

In the third quarter of 2012, net income attributable to the company jumped to approximately $50.2 million from $14.5 million for the same period in 2011. Profit per share was $0.43 compared with $0.15 in the prior year. Core earnings

were $58.8 million, or $0.50 per share, up 49 percent from $39.3 million, or $0.42 per share, in the third quarter of 2011.

“We’ve all faced other opportunities from time-to-time for sure,” said Mr. de Haan. He added that the team’s uniqueness and differing skills sets make the sum total more powerful than the individual components.

“So,” he mused, “we could create something bigger, more scaled and probably more fun by working together.”

Andrew SoSSen

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24

Analysis / December 2012

Post-Election, CRE Finance Council CEO Stephen Renna writes on Lame Ducks, the

Fiscal Cliff and Finding a Way Forward

Prior to the November elections, all meaningful efforts to address our looming fiscal problems were put on hold by legislators until the outcome was known.

Well, we now know the outcome, and it’s not that much different than pre-election, as far as the balance of power goes.

So lawmakers return to the nation’s capital knowing they can no longer avoid the tough choices. The self-imposed deadlines they made for dealing with our fiscal mess are upon them. Can President Obama and Democrats and Republicans in Congress figure out a way to get beyond the intractable fiscal positions each has staked out and enact meaningful solutions? Our nation’s economic future depends on it. And the commercial real estate finance industry

has much at stake. President Obama and a divided lame duck

Congress have less than a month to reach consensus on tax rates, budget cuts and raising the debt ceiling

or the nation will head over the “fiscal cliff.” This issue will be the No.1—and only—priority for the remainder of this year and likely the first quarter of 2013. The Congressional Budget Office predicts the country will drop into another recession if an agreement cannot be reached on our long-term fiscal future.

Immediately following the November elections, President Obama, Speaker of

the House John Boehner and Senate Majority Leader Harry Reid all spoke about the necessity of working together to find a solution for the nation’s long-

What Lies Ahead

TMO.1212.CS3.Feature2.indd 24 11/29/12 5:46:49 PM

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December 2012 / Analysis

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Analysis / December 2012

term fiscal health to avoid going over the fiscal cliff. However, listening to their speeches, it became clear that they have not changed their negotiating stances from the debt-ceiling debacle. President Obama, bolstered by his re-election, again voiced his opinion that taxpayers making more than $250,000 a year should pay more, and any deal on the fiscal cliff must include such revenues. Senator Reid mirrored the president’s position. In response, Speaker Boehner stated that he can support revenue increases in order to reach a deal. He added that broadening the tax base through lowering overall tax rates, while closing tax loopholes, is the right way to move forward.

Will two parties that cannot agree on the starting point for negotiations reach a deal? With less than a month to go, it is likely that the lame duck Congress and the president will reach a short-term agreement to fund the government and extend rates until the next Congress can be installed. Given that the American public elected a divided government for 2013 that bears a striking resemblance to the last Congress, we may end up simply kicking the can down the road.

If long-term debt and revenue decisions are to be made next year, both sides will likely have to give

ground. Can Speaker Boehner and the Republicans accept increased taxes for the highest tax brackets, and, in doing so, will they get something meaningful in return in the way of entitlement reform or spending cuts? Will President Obama and

Congressional Democrats move off the $250,000 income threshold? It’s a political number. There is nothing magic about it. Will they give in on real, non-defense spending cuts?

There isn’t likely to be a grand bargain on taxes and spending in the lame duck session. At best, expect there to be an agreement in principle that outlines the broad parameters of a deal that Congress will have to enact in many pieces during the first six months of 2013. It’s possible that the Simpson-Bowles report could provide the principles, or the near-agreement Speaker Boehner and President Obama almost came to last year. Such a budget deal could

put into place heretofore unknown polices affecting commercial real estate broadly and CRE finance more specifically.

Regardless, our industry will also face a laundry list of new regulations and laws that were in limbo until the American public made its political decisions in November. Roughly 33 percent of the

398 required rule-makings under Dodd-Frank have been completed, leaving a substantial majority outstanding. Many of the rule-makings that apply to CRE, including risk retention, will be finalized next year.

Regulators, just like everyone else in this country, were awaiting the results of the November elections prior to finalizing most major rules. With the president re-elected, many of the timelines for rule-makings will remain the same. Furthermore, regulators are aware that a split Congress allows for minimal changes to Dodd-Frank. However, there are likely going to be new leaders at regulatory agencies who may change the outcome of many rule-makings, including the Securities and Exchange Commission, the Treasury and the Commodities Futures Trading Commission.

The final regulatory decisions made on each rule-making—as well as the combined effect of the final rule-makings—will play a crucial role in determining both the playing field for and the amount of liquidity supplied by the CRE finance industry.

Lawmakers have punted on real fiscal reform so many times, it’s hard to imagine they will suddenly change their course in 2013. However, we are getting close to the end of the runway. We can see the wreckage in Europe that unrestrained fiscal policy brings. The year 2013 is shaping up to be an inflection point for our fiscal policies and the direction of our economy.

What any forthcoming national fiscal and monetary policies will mean to the economy, and to the commercial real estate finance industry in particular, remains to be seen. More granularly, we expect several legislative and regulatory policies in 2013 that will directly impact commercial real estate finance.

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not to be lost in 2013 will be two legislative priorities that will affect both Cmbs and portfolio lending.

Terrorism Risk Insurance Act (“TRIA”) Reauthorization: the current tria extension expires in 2014. Congress will spend 2013 deciding either to reauthorize tria, the Federal insurance backstop, or that the private sector is able to fill the gap. much like the fiscal cliff, any delay in reauthorization can bring Cre finance to a halt, as a substantial majority of lending requires terrorism risk insurance.

GSE Reform: While Gse reform won’t be decided next year, all the groundwork—and the positions of each party—will be solidified in 2013.


27

Changes to Watch in 2013The CMBS industry is facing regulatory directives that could impact its size, structure and viability. Portfolio lenders await the imposition of the Basel III rules, which could impose signifi cantly greater capital charges for construction and portfolio loans. Fannie Mae and Freddie Mac are being targeted for major reform, even privatization, which could aff ect liquidity fl ows and pricing for single-family and multifamily borrowers. And borrowers and lenders alike wait to see how comprehensive tax reform could aff ect underlying business entities and transactions. On all these policy fronts, CREFC will work to ensure that any policy changes promote sound underwriting, transparency and healthy liquidity levels for commercial real estate.

Here is summary of the major rule-makings and the central questions that regulators have to make in order to complete Dodd-Frank implementation for the commercial real estate industry:

Risk Retention: Regulators will off er either a re-proposal or fi nal rule in the fi rst quarter of 2013. The outcome of this rule alone will have a signifi cant impact on both the CMBS business model as well as liquidity for CRE fi nance in general. Congress asked the regulators to require 5 percent risk retention for CMBS transactions, but it also allowed for the current CMBS structure, through the B-piece investor, to be the retainer of that risk. However, the proposed risk retention rule would fundamentally change the CMBS risk-transfer model to a risk-alignment model, making the B-piece structure unworkable. If implemented as proposed, CMBS issuance, and thus liquidity, would be severely limited.

Proprietary Trading: Regulators expect to fi nalize the Volcker Rule by the end of this year. Typical CMBS transactions should not be aff ected by the fi nal rule. However, the central question will be whether the fi nal rule will require enhanced compliance for anything but “plain vanilla” conduit, single-asset or single-borrower CMBS transactions. If it is too strict, issuers may fi nd the compliance requirements too burdensome to go beyond “plain vanilla” transactions. Regulators are going to have to balance the cost of monitoring risk versus the benefi t of off ering suitable liquidity for the market.

Regulation AB: Once risk retention is fi nalized, CMBS disclosure rules should follow shortly therea� er (likely in Q2 2013). Within the rule, the SEC recognized CREFC’s Investor Reporting Package™ as a model disclosure package for CMBS ongoing reporting, which investors already receive in every transaction. The SEC will have to determine whether it will allow for the industry to submit disclosures to the agency using the IRP, or whether servicers will have bear the costs of dual reporting—using the IRP for investors and another method for the SEC.

Basel Capital Standards: The U.S. lags far behind the rest of the world in implementing Basel III rules, and there is pressure from regulators to catch up. However, Congress weighed in on the 800-page proposed rules in November, with concerns that the rules are too complex and burdensome for community banks. Regulators now have to walk a fi ne line. How do they balance the will of Congress while at the same time a� empting to stay aligned with international standards? The outcome could create an uneven playing fi eld for national and international fi nancial institutions.

Credit Rating Agency Reform: The SEC is likely to release a study on how, or if, to implement the Franken Amendment, which calls for random assignment of fi rms for initial credit ratings. While the industry believes Franken’s model is not in the best interests of CMBS, no one has been able to come up with anything be� er than the current model. The question is, will the SEC? There is no date to implement the fi ndings of the study.

December 2012 / Analysis

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Q&A / December 2012

by Carl Gaines

Jay Neveloff Kramer Levin Naftalis & Frankel The Mortgage Observer spoke to Kramer Levin partner Jay Neveloff this month. Mr. Neveloff, a 24-year veteran at the firm, told us what he’s hearing from his wide range of clients following November’s elections and what many of those clients are busy doing with the end of the year fast approaching.

The Mortgage Observer: What is your area of focus and how long have you been at the firm?

Jay Neveloff: My focus is real estate transactional work—buying, selling, developing, borrowing, lending, condominium, leasing. Even though I’ve been at the firm for 24 years, I’m actually practicing with some of my partners for my entire career. It was just the transition of how the firm worked. I started at Marshall Bratter and then when Marshall Bratter dissolved in 1981, I went with the real estate group to Rosenman, which is now Katten Muchin.

And you’ve had the same focus since?All deals. My whole career has been deals.

Who are some of the clients you represent?I represent a number of private equity funds—

from Fortress to Westbrook to DLJ. I’m doing something for Carlyle, and I’ve represented Donald Trump for over 30 years. I represent the Ponte family, which has been active. I represent Related, CapitalSource, Bruce Eichner. It’s an interesting variation of clients.

Do you like having a mix of clients? I do. I love it. And my clients become my friends.

Most of my very close friends are clients, which makes it nice.

Among your developer clients, what are you hearing about the recent election results?

Apart from moaning that they expect to pay more in taxes, aside from the fact that there is a tremendous sense of urgency to close deals that can be closed in this calendar year, life is going on. They are continuing to look at deals, look for equity, look for sites. I don’t believe that the election truly will have any long-term effect on New York real estate. I don’t quite know what the impact will be outside of New York, but my instinct

is that if there’s a concern that the capital gains tax rate is increasing, most people who are investing or developing now aren’t going to sell a year later, in all likelihood. It may be two years, it may be three years, it may be five years, it may be eight years. So they’re complaining and they’re moaning, but there is still product. And I think that the people who are selling are still going to sell. The taxes are what the taxes are. We’re collaborating with the tax department on different structures, and we’ve always done that.

What are some the ways that you can structure deals differently to benefit clients?

In restructurings, as an example—and there are certainly some restructurings that are going through the process—one way is for new equity to come in and, instead of buying out the old borrower, the old equity, to leave those previous owners in the deal and not look for capital. That’s one way. Another way is clients looking at selling property and maybe not selling all of it. We have situations where we’re looking at creative condominium structures to allow the seller or the current owner to keep some of the property and sell another part of the property. And that reduces the amount of the sale. The deal structures have consistently become more complex.

What’s causing that?There is a lot of money around that has a niche

in the market to invest. The numbers have gotten bigger because the prices have gotten bigger, so people need more money to do it. And the lawyers and the bankers and the brokers learned how to do all this stuff. These are techniques that have been around corporate finance. I think corporate has led the way, and real estate finance is right behind it.

You mentioned that there are a lot of smart finance people and lawyers who are coming up with these highly complicated, structured deals. Any danger spots looming?

There is a danger spot. I think that when people

buy real estate based on spreadsheets, they’re in a danger zone.

Based on spreadsheets in what way? When you invest as a lender, as an equity

investor as a developer in real estate, you fundamentally have to know and understand the real estate. It’s not just someone from Harvard Business School or Wharton doing spreadsheets and saying ‘I estimate that the rent is going to go up by X percent a year, and inflation is going to be this and the value of the dollar is going to do this versus that.’ That’s all important, but unless you fundamentally understand the real estate—its location, the demographics, the market—you expose yourself to risks that you shouldn’t.

Apart from taxes, what are your clients most worried about?

What comes up most often is a double-dip recession in Europe. People are also concerned about the fundamentals of the economy and unemployment. We still haven’t gone through the home mortgage debacle and that hasn’t gotten sorted out. And I think that my clients in particular would like to see all the residential mortgages get sorted out and for there to be more jobs—because if there are more jobs, there is more stability.

Sandy Lindenbaum passed away this summer. How is the firm recovering?

He’s one of the few lawyers who ever defined a sector of the legal market. I viewed him as a mentor and a friend. Sandy put together an amazing land-use team. It was expanded when Paul Selver and his team joined us several years ago. Nobody could ever replace Sandy, but we still without a doubt have the pre-eminent land-use group in the city. He’s irreplaceable, and it’s a big loss on so many levels.

Jay Neveloff

TMO.1212.CS3.Q+A.indd 28 11/29/12 5:51:34 PM

29

December 2012 / Culture

Walk It OffLet us talk turkey for a moment. And pie and sufganiyot. According to a 2000 article in The New England Journal of Medicine, the average American gains less weight over the holidays than you might expect—just one solitary, lonely pound. Problem is, it isn’t lonely for long, instead sticking around until the next year.

But commercial real estate finance folks aren’t a sedentary lot, right? Even in today’s technologically advanced world, the best way to get a handle on a property or neighborhood’s value is to get out and walk it. So we

thought, why not keep walking and banish that solitary pound before it hangs around long enough to make friends?

These gadgets will help you do just that. All four track varying levels of activity and sync to desktop programs in addition to phone or tablet apps. And better yet, it’s easy to connect with your friends and make a contest out of who can burn off the most of mom's fruitcake.

Because, let’s face it: the Commercial Real Estate Finance Council's January Conference (South Beach, anyone?) is only a little more than a month away.

Basis Band $199

UP by Jawbone $129.99

Fitbit One $99.95

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TMO.1212.CS3.CULTURE.indd 29 11/29/12 5:46:19 PM

30

The Sked / December 2012

The Sked: December

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2-5Cold where you are? Got the winter blues? Escape

the cold and head out West for an extended weekend in Arizona. Bring your golf clubs, too—there’s a planned outing! The speaker roster for this global investing conference includes execs from Morningstar, Goldman Sachs and Knight Capital Group.

IMN’s Global Indexing & ETFs Golf Outing; Arizona Biltmore Resort & Spa, 2400 East Missouri Avenue, Phoenix, Ariz. Visit www.imn.org for more information.

3-4Shop ’til you drop and cross some holiday

gifts off your list in between sessions at the International Council of Shopping Centers’ conference, conveniently located a block away from Fifth Avenue. Session topics include Deal Making and Retail Runway.

ICSC 2012: New York National Conference & Deal Making; Hilton New York and Sheraton New York Hotel & Towers, 1335 Avenue of the Americas, New York, N.Y. Call or email Annie Leibovitz at (773) 360-1179 or [email protected], or visit www.icsc.org for more information.

4’Tis the season to throw on your fancy duds and

head to the New York Athletic Club for the MBA of New York’s cheerful holiday event. But really: wear your best duds. The dress code is strict.

MBA of New York: Annual Holiday Event; New York Athletic Club NYC, 180 Central Park West, New York, N.Y. 6-8 p.m. Visit www.mbany.org for more information, or email [email protected] to register.

6Come for a small chat on moving real estate

operations to the cloud. Make sure to order One

Market’s famous mint chocolate chip ice cream sandwich and you’ll be on cloud nine, too.

Realcomm CIO Luncheon Forum: “Moving RE Operations to the Cloud—Debunking the Myths.” One Market Restaurant, 1 Market Street, San Francisco, Calif. 11:30 a.m.-2:30 p.m. Visit www.realcomm.com for more information.

6What does the New Year hold for the debt

markets? Listen to some predictions at the CRE Finance Council’s after-work seminar on the current—and future—state of balance sheet and CMBS lending.

“Lender Perspective: Current State of the Debt Markets & Trends for 2013”; Offices of Ballard Spahr LLP, 1735 Market Street, Philadelphia, Pa. 5:30-8 p.m. Visit www.crefc.org for more information.

6The default servicing industry kicks off its

shoes at REOMAC’s annual dinner and holiday

celebration in Los Angeles. The nonprofit trade association, which serves the nonperforming assets industry, promises a mix of official business, awards and celebration.

REOMAC Annual Dinner and Holiday Celebration; Sheraton Gateway Los Angeles Hotel, 6101 West Century Boulevard, Los Angeles, Calif. 4:30 p.m. Visit http://www.reomac.org/events to register or for more information.

7The workshop’s title may be “Should I Retain

Servicing?” but the real question on your mind just might be “Should I bring my skiing gear?” This Mortgage Bankers Association workshop promises to list key considerations that should be evaluated before companies decide to retain mortgage servicing.

“Should I Retain Servicing?” An MBA Workshop; Embassy Suites Denver International Airport, 7001 Yampa Street, Denver, Colo. Call or email Marina Walsh at (202) 557-2817 or [email protected], or visit mortgagebankers.org for more information.

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32

Of Interest / December 2012 An index of all the people, places, addresses and companies mentioned in this issue

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1 Market Street, San Francisco, California � � � � � � � � � � � � � � 301335 Avenue of the Americas, New York, New York � � � � � � � � � � � � � � � 301735 Market Street, Philadelphia, Pennsylvania � � � � � � � � � � � 30264-350 Kent Avenue, Brooklyn, New York � � � � �102400 East Missouri Avenue, Phoenix, Arizona � � � � � � � � � � � � � � � � � 306101 West Century Boulevard, Los Angeles, California � � � � � � � � � � � � � � 307001, Yampa Street, Denver, Colorado � � � � � � 30

AActovia � � � � � � � � � � � � � � � � � �10American Enterprise Institute � � � � � � � � � � � � � � � � �13Aoki Corp � � � � � � � � � � � � � � �21Astoria Federal Savings Bank � � � � � � � � � � � �10

BBank of America � � � � � � � �21Bank United � � � � � � � � � � � � � � 8Bisacquino, Thomas � � � �14Ballard Spahr LLP � � � � � 30Bisacquino, Thomas � � � �14Blackstone � � � � � � � � � � � � � �21Boehner, John � � � � � � � � � � 24Bohlsen, John � � � � � � � � � � � � 8Bratter, Marshall � � � � � � � 28Brennan, John � � � � � � � � � �14Breuer, Paul � � � � � � � � � � � � � � 8Broderick, Matthew � � � � �19Brown University � � � � � � 20

CCapital One � � � � � � � � � � � � � �10CapitalSource � � � � � � � � � � 28Carlyle � � � � � � � � � � � � � � � � � � 28CCIM Institute � � � � � � � � � �14Chandan, Sam � � � � � � � � � � �13Chandan Economics � � � �13Collett, Hal � � � � � � � � � � � � � �14Commercial Real Estate

Finance Council � � � � � � � 29Cornell University � � � � � 20Costa, John � � � � � � � � � � � � � � � 8Countrywide Financial Corp� � � � � � � � � � 20

DDaly, Cynthia Morgenstern � � � � � � � � � � � � � � � � � � � � � � � � � � �14D’Amico, Wayne � � � � � � � � �14de Hann, Warren � � � � � � � 20Denver International Airport � � � � � � � � � � � � � � � � � 30Diermeier, Jeffrey � � � � � � �14Dime Savings Bank of Williamsburgh � � � � � � � � � �10DLJ � � � � � � � � � � � � � � � � � � � � � 28Domino Sugar Factory � � � � � � � � � � � � � � � � � �10

EEichner, Bruce � � � � � � � � � 28ETF � � � � � � � � � � � � � � � � � � � � � 30

FFannie Mae and Freddie Mac � � � � � � � � � 13, 27FBR Capital Markets � � � �18Federal Housing Finance Administration � � � � � � � � � �13Fellows, Boyd � � � � � � � � � � 20Fierce, Gregory � � � � � � � � � � 8Financial Accounting Foundation � � � � � � � � � � � � � �14Financial Accounting Standards Board � � � � � � � �14First Republic Bank � � � � � � 8Flushing Savings Bank � � � � � � � � � � � � � � � � � � � � �10Fortress � � � � � � � � � � � � � � � � 28Four Springs Capital Trust � � � � � � � � � � � �14

GGilmartin, Thomas � � � � � � � 8Gleacher & Company Securities � � � � � � � � � � � � � � � �14Goldman Sachs and Knight Capital Group � � � � � � � � � � 30Government Accounting Standards Board � � � � � � � �14

Gowanus Canal Community Development Corp� � � � � � � � 10Gyourko, Joe � � � � � � � � � � � �13

HHaliotis, Sophie � � � � � � � � � � 8Herald National Bank � � � � 8Hilton New York � � � � � � � 30Hotel Institute Montreux � � � � � � � � � � � � � � 20Hudson City Bancorp � � � � � � � � � � � � � � � � � � 8Hughes, Thomas � � � � � � � �14Hunt, William � � � � � � � � � � �14

IIMN � � � � � � � � � � � � � � � � � � � � 30International Council of Shopping Center � � � � � � � 30

JJersey Boys � � � � � � � � � � � � � �19Joshua Stein PLLC � � � � � �12JPMorgan Chase � � � � � � � �10

KKansas, John � � � � � � � � � � � � � 8Keane, Brendan � � � � � � � � �14KKR Financial Holdings 21Kramer Levin Naftalis & Franklin � � � � � � � � � � � � � � � � 28Kuhn, Steven � � � � � � � � � � � �14

LLeprohon, Paul � � � � � � � � � � � 8Levin, Kramer � � � � � � � � � � �10Lightstone Group � � � � � � �10Lindenbaum, Sandy � � � � 28Selver, Paul � � � � � � � � � � � � � 28

MMiller, Robert � � � � � � � � � � �14Monmouth Real Estate Investment Corporation � � � � � � � � � � � � �14Morgan Stanley � � � � � � � � 20Morningstar � � � � � � � � � � � � 30M&T Bank Corp� � � � � � 8, 10Muchin, Katten � � � � � � � � 28

Mutual Mortgage Insurance Fund � � � � � � � � �13

NNAIOP � � � � � � � � � � � � � � � � � �14NCB � � � � � � � � � � � � � � � � � � � � �10Neveloff, Jay � � � � � � � � � 10, 28New York Athletic Club � � � � � � � � � � � 30New York Community Bank � � � � � � �10Nomura � � � � � � � � � � � � � � � � 20North Fork Bank � � � � � � � � � 8

PPeople’s United Bank � � � � 8Perrin, Marc � � � � � � � � � � � � �21Pine River Capital Management � � � � � � � � � � � �14Popular Community Bank � � � � � � � � � � � � � � � � � � � � � � 8Poggi, Gabe � � � � � � � � � � � � � �18Prologis � � � � � � � � � � � � � � � � �14Prudential Mortgage Capital Company � � � � � � �13

RRealcomm � � � � � � � � � � � � � � 30Reilly, Eugene � � � � � � � � � � �14Relates � � � � � � � � � � � � � � � � � 28Renna, Stephen � � � � � � � � 24REOMAC � � � � � � � � � � � � � � 30Rodewald, Catherine � � � �14Rosenman � � � � � � � � � � � � � � 28Roth, William � � � � � � � � � � �14

SSbarro � � � � � � � � � � � � � � � � � � �19Schenck, William III � � � � � 8Seaton Gateway Los Angeles Hotel � � � � � � � � � � 30SEC � � � � � � � � � � � � � � � � � � � � � �27Sheraton New York Hotel & Towers � � � 30Siering, Thomas � � � � � � � � �14Signature Bank � � � � � � � � � �10Smith, George � � � � � � � � � � �14Sokoloff, Garrett � � � � � � � � � 8Sossen, Andrew � � � � � � � � 20Sovereign Bank � � � � � � � � �10

Starwood Capital Group � � � � � � � � � � � � � � � 18, 21Starwood Property Trust � � � � � � � � � � � � � � � � 18, 21Stein, Joshua � � � � � � � � � � � �12Sternlicht, Barry � � � � � � � �18Stoler, Michael � � � � � � � � � �10

TTengel, Jeffrey � � � � � � � � � � � 8The Elmhurst Group � � � �14The Mortgage Bankers Association � � � � � � � � � � � � � 30The New England Journal of Medicine � � � � 29Times Square Gateway Center � � � � � � � � �18Tokarski, Chris � � � � � � � � � 20TriState Capital Bank � � � � 8Trump, Donald � � � � � � � � � 28Turkey � � � � � � � � � � � � � � � � � � 29Twardock, David � � � � � � � �14Two Harbors Investment Corp� � � � � � � �14Two Trees Management Co� � � � � � � � �10

UUBS � � � � � � � � � � � � � � � � � � � � � � � 8UBS Global Asset Management � � � � � � � � � � � �14United International Bank � � � � � � � � � � � � � � � � � � � � �10University of Pennsylvania � � � � � � � � � � � �21U�S� Bancorp � � � � � � � � � � � � � � 8U�S� Bank National Association � � � � � � � � � � � � � � � 8

VValley National Bank � � � �10Vanguard Group � � � � � � � �14

WWard, Stew � � � � � � � � � � � � � �14Westbrook � � � � � � � � � � � � � � 28Westin Co� � � � � � � � � � � � � � � �21Wharton Real Estate � � � �13Wharton School � � � � � � � � �13White, Hank Jr� � � � � � � � � �14

TMO.1212.OfInterest.indd 32 11/29/12 5:48:44 PM

Untitled-48 1 10/24/12 11:35:47 AM

$17,000,000 Debt

Multifamily New York

$120,000,000 Debt & Mezzanine

Office New York

$7,500,000 Debt Land

Chicago

$6,737,500 Debt Retail

Pennsylvania

24,550,000 Debt & Mezzanine

Retail Mississippi

$27,000,000 Debt Retail

Washington, DC The specific assets and details of the transactions are purposely limited due to respect for our clients and their confidentiality.

ONE FIRM

Capital, fueled by innovation.

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The Mortgage Observer December 2012

Documents

Transcript of The Mortgage Observer December 2012