The TreppWire Podcast: A Commercial Real Estate Show

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)

We dig into bets on the CMBX index, retail performance and store closings, the new wave of CMBS servicer data for lodging and retail, self-storage’s status as a “recession-resistant business,” the outlook for student housing, and the quality of leveraged loan covenants. Episode Notes: A look at retail performance and store closings (2:30) The new wave of CMBS servicer data for lodging and retail (6:49) Digging into bets on the CMBX index (11:56) Is self-storage a “recession-resistant business”? (22:43) Potential student housing distress (27:00) Has the quality of leveraged loan covenants deteriorated? (31:26) The return of sports! (33:46)

We welcome Lonnie Hendry, VP of CRE Product Management at Trepp, to examine the impact of COVID-19 on CRE property valuations. We also discuss fresh servicer data that shows increases in hotel and retail delinquencies, new CMBS issuance and what it means for the market, commercial mortgage investment returns for life insurance companies, and revisions to the TALF program to include a broader range of leveraged loans. Episode Notes: New CMBS issuance and what it means for the market (2:12) More store closures and what happens next (4:31) Fresh data on hotel and retail loan delinquencies (9:00) What impact does this market dislocation have on CRE property values? (16:23) Looking at the drop in commercial mortgage returns for life insurance companies (29:59) How much will the TALF program revisions help the leveraged loan market? (32:22) The outlook for college football (and more importantly, student housing) this fall (35:53)

More than half of the states are now moving toward a reopening, but we’re still dealing with news of increased infections and economic data that tells us we have a long way to go toward a recovery. Jobless claims fell slightly to 3.2 million last week and the markets reacted positively to that slight decline. In all, more than 33 million are out of work and with lockdowns lifted, all eyes in the CRE world are on retail and lodging  performance. In this week’s episode, we discuss how we assess CRE risk moving forward, the next steps in the recovery for hotels, the future of retail and the Amazon effect, takeaways from Warren Buffett and Sam Zell, performance in the corporate loan market and more. Episode Notes: Takeaways from this week’s macroeconomic data (0:55) Words of wisdom from the Oracle of Omaha Warren Buffett and Sam Zell (4:03) Retailer bankruptcies keep coming (8:13) How can brick and mortar continue to compete with Amazon? (10:51) Hotel performance and what happens next? (16:58) Assessing CRE risk moving forward (23:17) Looking at performance in the corporate loan market (30:15) The human impact of the COVID-19 crisis (35:04) Coping in our work from home environments (38:44)

This week, we discuss the rise in CRE delinquencies and the new way to interpret the numbers, what the smart money is looking at, the ongoing challenges in lodging, and signs of life in the corporate loan market, among many other things. Episode Notes: The scorecard for the CMBS and CRE industries (0:58) A look at REIT earnings (6:20) The rise in CMBS delinquencies (11:59) What the smart money is looking at (13:33) New numbers from Fannie and Freddie (16:04) What's the future of co-working? (19:22) Lessons for CRE from this week's tech earnings (23:24) Digging into the lodging sector (26:56) Signs of life in the corporate loan market (29:57) Mother's Day recommendations (33:57)

Most CRE landlords who missed their April 1st payments have a 30 day grace period, but our preliminary data shows that 11%+ of CMBS loans will be 30 days delinquent when that grace period elapses, which would surpass the highest level hit during the Great Recession. We discuss the effect of oil prices on the broader market, the coming wave of distressed assets, forbearance requests, the week in retail and CMBX, CLO downgrades and more. Episode Notes: How will the drop in oil prices affect the broader market? (0:47) Revisiting the bet for and against CMBX (5:15) Assessing the scale of CMBS borrower relief requests (8:30) This week in retail store closures (15:32) What happens when tenants are allowed to break their lease? (19:20) The revival of TALF in the current COVID-19 economy (24:53) How are CLO managers dealing with leveraged loan downgrades? (31:59) Where do we go from here? (36:33)

We discuss the sharp increase in non-payment on hotel and retail loans, the discouraging macroeconomic data, takeaways from bank earnings reports, downgrade risk in CLOs, and what we're doing to keep our sanity. Episode Notes: The discouraging economic data (00:52) Takeaways from bank earnings reports (02:23) The sharp increase in non-payment on hotel and retail loans (07:20) How are CMBS servicers and borrowers dealing with forbearance requests? (10:48) The outlook for the multifamily and office sectors (14:42) Downgrade risk in CLOs? (19:58) What are we doing to keep our sanity? (27:56)

In this week's episode, Manus Clancy, Senior Managing Director at Trepp, and Joe McBride, Head of CRE Finance at Trepp, discuss their predictions for the economic recovery, potential concerns in the CMBS market, the impact of COVID-19 on student and senior housing, CLO prices in the oil and gas sector, and everything else newsworthy from the week. Episode Notes: Predictions for the economic recovery (0:39) (0:39) Potential concerns in the CMBS market? (4:30) A look at student and senior housing (8:08) The impact of COVID-19 on community banks (11:48) Leveraged loan prices in the oil and gas sector (15:32) News predictions for the holiday weekend (18:35) An analogy between Forrest Gump’s shrimp business and balance sheet lenders (21:30)