FEBRUARY 26, 2010 Brevan Howard Hires Trader for CMBS Push Brevan Howard Asset Management, one of Europe’s largest fund man- 3 PCCP Seeks Capital for 2 Debt Funds agers, has lured trader Ahsim Khan from Morgan Stanley to spearhead a big push 3 PB Finances New Virginia Building into commercial MBS investments. The London firm is mum about how much capital Khan will be putting to work. 3 Banks Shops Distressed Colo. Loans But the buzz is that the initial allotment will be at least $250 million and could range up to $1 billion. 4 Investors Snap Up Retail REIT Bonds At Morgan Stanley, Khan was an executive director and co-head of securitized 4 Zabik’s Loan Fund Ready to Roll products trading in North America. He left the bank’s New York office on Monday, and is expected to join Brevan’s London office as a partner in April. 6 Prime Finance Holds First Close Khan will pursue a relative-value trading strategy encompassing a broad mix of 6 Canadian Fund Seeks US Investors fixed-income products, with a heavy emphasis on CMBS. He will also buy residen- tial mortgage bonds, CDOs and credit-default swaps tracked by Markit’s CMBX, 6 Fitch Unit Revamps Valuation Model ABX.HE and ABX.Prime indices. Khan will also invest in distressed bonds. It’s unclear how Khan’s jump to Brevan fits with the fund manager’s existing 9 ‘SF’ Suffix for Bond Ratings Closer See BREVAN on Page 7 9 HUD Dealing $300 Million of Loans Startup Taking Aim at Distressed-Debt Plays Five real estate pros have teamed up to form an investment-management and advisory firm. THE GRAPEVINE The company, Ocean West Capital of Santa Monica, Calif., is run by former Nomura lender Troy Miller; former Maguire Investment executives Russ Allegrette Gary Wong has joined San Francisco and Phil Choi; Ted Bischak, who previously worked at Maguire Properties; and fund operator W3 Capital as a principal attorney Peter Swain. handling acquisitions. He started work Ocean West plans to work with special servicers and portfolio lenders to resolve last month, reporting to Susan Sagy, one mid-size to large mortgages on West Coast office and multi-family properties that of the firm’s co-founders. The firm is have significant vacancy issues or other problems. It will pump in equity and pro- raising capital for W3 Value Add Fund, a vide operational help, including leasing and management services. planned $200 million vehicle that would “The opportunity here is not so much with well-stabilized properties that are 90% invest in debt and equity of office prop- occupied,” said Miller. “With that situation, the servicer sells the property with a good erties in California and the Pacific See STARTUP on Page 9 Northwest. The vehicle would be the firm’s first. Wong spent six years with Spring Hill Seeking to Expand Broker Unit Prudential’s San Francisco office before he was let go in July. He also did stints at Spring Hill Capital, which received its broker-dealer license from the Financial CB Richard Ellis and AEW Capital. Industry Regulatory Authority on Wednesday, plans to hire up to 10 structured- finance specialists by yearend. Former Citigroup research chief Darrell The New York company wants to beef up its 20-member staff so it can take on Wheeler has brought in his first recruit assignments to distribute new issues of commercial MBS and other structured- since joining broker-dealer Amherst finance products as markets revive. The firm, which was formed about a year ago, Securities as head of commercial MBS also wants to step up trading of CMBS, residential mortgage bonds, CDOs and investment strategy on Feb. 3. Vivek asset-backed securities in the secondary market, where it has been crossing bonds Tiwari, who previously worked for on a borrowed license since last year. Wheeler as a CMBS research associate at Spring Hill has already started recruiting a structured-product sales chief, said Citi, joined Amherst’s New York office as managing partner Kevin White. He’s also interviewing candidates for the sales and a vice president on Monday. After leav- research openings, which range from entry-level to senior posts. ing Citi in November, Tiwari worked at The sales-and-trading desk mostly targets illiquid securities, commercial real See GRAPEVINE on Back Page See SPRING on Page 7 THE TIME IS NOW! PRICING AND TERMS OVER THE PAST 90 DAYS HAVE IMPROVED MATERIALLY.

EASTDIL SECURED’S RECENT LOAN SALE AND FINANCING ACTIVITY:

SENIOR, BNOTE AND MEZZ NOTE SALES: Closed in Last 90 Days: $1.1 Billion Under Contract to Close: $732 Million Currently Marketing: $1.0 Billion

DEBT PLACEMENT / MORTGAGE ORIGINATION: Closed in Last 90 Days: $445 Million Under Contract to Close: $440 Million Currently Marketing: $1.8 Billion

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www.eastdilsecured.com February 26, 2010 Commercial Mortgage ALERT 3

PCCP Seeks Capital for 2 Debt Funds ceeds to help pay off a $99.1 million construction loan from a SunTrust syndicate. Fund operator PCCP is hoping by midyear to complete its NewMarket developed the 311,000-square-foot building on first rounds of capital raising for two debt vehicles seeking to land adjacent to its headquarters for MeadWestvaco, a paper attract a combined $1 billion of equity. and packaging firm. MeadWestvaco signed a 13.5-year lease The El Segundo, Calif., firm believes it is giving itself an on the property, at 501 South Fifth Street in Richmond’s finan- opportunity to appeal to investors with different risk profiles cial district. by offering two funds at once: PCCP First Mortgage Fund 2 PB’s loan has a five-year term, with a 15-year amortization and PCCP Workout and Recapitalization Venture. The origina- schedule. The loan was pegged to Libor plus 400 bp, with a tion fund would shoot for a core return of 8-10% and use lever- floor Libor rate of 200 bp. NewMarket used an interest-rate age sparingly, while the more opportunistic vehicle has a high- swap to lock in the rate at 6.6%. yield return goal of 15-18%. NewMarket, the parent of two fuel-related firms, lined up PCCP, with some $6 billion under management, is aiming the three-year construction loan from the SunTrust syndicate to raise $500 million for each fund — an ambitious goal in the in August 2007. The rate was Libor plus 140 bp. current environment. After suffering heavy losses on real In 2007, NewMarket also entered into an arrangement with estate investments, most institutional investors are reluctant to Principal Commercial Funding, which conditionally agreed to make new commitments. fully refinance the construction loan at maturity with a 13.5- The origination fund would look to write floating-rate loans year mortgage. Principal planned to syndicate the loan. But with terms of up to three years, and investors are hearing it when the syndication market dried up, the arrangement was would hold its loans to maturity. The vehicle would write most dropped. of its mortgages on office, retail, multi-family and industrial NewMarket then turned to PB, a subsidiary of German properties. It is the firm’s second attempt at an origination fund. lender Deutsche PostBank. Berkadia Commercial Mortgage In 2008, PCCP scotched a plan to raise money for an entity that brokered the loan, which closed on Jan. 28 and has two 13- would also have originated and held floating-rate loans. At the month extension options. O time, potential limited partners passed on the offering in favor of debt funds shooting for higher, more opportunistic returns. Bank Shops Distressed Colo. Loans The firm evidently hopes to address that sentiment by pair- ing its origination strategy with a workout fund. The workout A community bank is marketing $73.6 million of distressed vehicle would be more of a distressed-asset play, providing debt loans on a half-dozen parcels and luxury homes in Colorado or equity to borrowers in distressed situations. The operator ski country. could work with sponsors to complete stalled projects or fore- The six loans, which investors can bid on individually, close and assume control of the underlying real estate. PCCP range in size from $5.9 million to $22.3 million. The collateral Workout would likely use leverage amounting to at least 50% of properties are in Aspen, Beaver Creek and Snowmass Village. its investments, giving it buying power of more than $1 billion. Most of the loans carry floating rates and recourse provisions. PCCP began marketing both funds in October without a Alpine Bank of Glenwood Springs, Colo., has tapped Mission placement agent. Capital Advisors of New York to manage the offering. Indicative At the same time, the firm is managing two Lehman bids are due March 9, and the final deadline is March 23, with a Brothers mezzanine funds it assumed control of in December. closing scheduled for a week later. Those funds are now dubbed PCCP Mezzanine Recovery The offering includes a $22.3 million note on a 2.4-acre par- Partners 1 and 2. The $1.1 billion first fund began raising equi- cel at the base of Ajax Mountain in Aspen. The borrower, a sub- ty in 2005 and was fully invested by May 2008. Its successor sidiary of Centurion Partners of Newport Beach, Calif., filed for raised $1.3 billion of equity in 2008. It invested $700 million bankruptcy protection last fall, apparently to prevent Alpine and released its remaining undrawn commitments. from selling the mortgage. But a judge dismissed the attempt. PCCP was founded as Pacific Coast Capital Partners by for- A Centurion representative has been quoted in a local newspa- mer real estate attorney William Lindsay and three Wells Fargo per saying that his firm is trying to resolve the loan. executives: Nick Colonna, Aaron Giovara and Don Kuemmeler. There is also a $15.6 million defaulted loan on 17 finished The firm initially invested in bridge loans and mezzanine debt, lots near Snowmass Ski Resort in Snowmass Village, about 10 but later moved into property-fund management. O miles from Aspen. A $7.9 million subperforming mortgage is backed by a partially built, 16,000-square-foot residence, also PB Finances New Virginia Building at the base of Ajax Mountain. As of Sept. 30, Alpine’s parent had $1.2 billion of commer- PB Capital has originated a $68.4 million mortgage on a cial real estate assets, consisting of $582.6 million of commer- fully leased office building in Richmond, Va., that was com- cial mortgages, $23 million of multi-family loans and $609 pleted late last year. million of construction and land loans. Four percent of those The borrower, NewMarket Corp. of Richmond, used the pro- loans were nonperforming. O February 26, 2010 Commercial Mortgage ALERT 4

Investors Snap Up Retail REIT Bonds widening. Secondary-market spreads on a pool of 10-year REIT bonds with an average rating of triple-B-plus stood at Federal Realty Investment found strong demand on Wed- 250 bp over Treasurys last Friday, up from 248 bp a week ear- nesday for a $150 million offering of unsecured bonds. lier and 226 bp a month ago. Those same bonds averaged 380- The 10-year securities attracted $800 million of bids, 390 bp in mid-August, according to a weekly index compiled enabling bookrunners Bank of America and Wells Fargo to by Wells Fargo. price them at 225 bp over Treasurys, down from initial price Federal Realty benefited from the fact that its offering was talk of 237.5 bp. The 5.9% bonds, rated Baa1/BBB+ by Moody’s the first by a REIT since Feb. 4. Also, trading in the secondary and S&P, were priced to yield 5.924%. market was light this week. The offering demonstrates how far the REIT market has ral- Ten-year bonds floated by Federal Realty in 2007 were lied since last summer. In August, Federal Realty floated $150 changing hands on Wednesday at 205-206 bp over Treasurys million of five-year bonds at a 338-bp spread. The 5.9% paper — a tighter spread than the new bonds. Investors said the new yielded 6.15%. paper was cheaper because it has a longer term to maturity and Investors said the latest offering fared well, considering that bondbuyers often demand a slightly higher return to take it fell below the $250 million threshold for inclusion in the down new securities. O Barclays Corporate Bond Index. Many fund managers invest via the index, creating built-in demand for included bonds. Zabik’s Loan Fund Ready to Roll But Federal Realty, a shopping-center REIT in Rockville, Md., usually sells $75 million to $150 million of notes at a time, so A planned $500 million origination fund led by former the company “doesn’t make it on a lot of investors’ radar BlackRock executive Alex Zabik is ready to start lending. screens,” said one bondbuyer. The vehicle, WestRiver Real Estate Finance Fund, will focus REITs have floated $10.2 billion of bonds since the market on originating fixed-rate senior and mezzanine loans with re-opened last August following a long dry spell. The pickup in terms of 5-7 years. It can also buy loans in the secondary mar- issuance was accompanied by a rally that ran out of steam in ket. The return goal is 12%. mid-January, when spreads reversed course and started The fund is operated by WestRiver Capital, a joint venture between Westmont Hospitality and RiverStone LLC, an invest- ment-management firm formed by Zabik, who is the fund manager. The vehicle held a first close this week, lining up $125 mil- NOTICE OF PUBLIC SALE OF COLLATERAL lion of commitments, including $75 million from Wyoming State Loan and Investment Board. It was the pension system’s Please take notice that 100% of the membership interests in each of EMERALD DUNES GOLF COURSE LLC and first pledge to an origination vehicle. EMERALD DUNES LAND LLC (collectively, the “Owner”) and With equity now on hand, WestRiver is expected to close its all other “Collateral” as defined in that certain Pledge and first loan soon. The operator declined to comment. Security Agreement dated as of October 31, 2006, by and The fund will focus on loans of $10 million to $30 million between Emerald Dunes Mezz, LLC (the “Debtor”) and on all property types. Coupons for senior mortgages are likely Lehman Brothers Holdings Inc. (“Secured Party”) and all proceeds of any of Collateral (all such assets, the “Collateral”) to hover around 8-10%. B-notes will be priced in the low dou- will be offered for sale at a public auction by Secured Party as ble digits, while mezzanine loans and preferred equity will secured party and sold to the highest Qualified Bidder on carry rates of about 15%. March 5, 2010 at 10:00 a.m. at the law offices of Herrick, The fund charges a 1.5% management fee, although it Feinstein LLP, 2 Park Avenue, New York, NY 10016. might be lower for large commitments. After investors receive This sale is held to enforce the rights of the Secured Party a 9% preferred return, WestRiver is entitled to half of the prof- under the Security Agreement. The Secured Party reserves the right to reject all bids, modify the Terms and Conditions its until it amasses 20% of cumulative distributions. It then (defined below) and terminate or adjourn the sale to another gets 20% of any additional profits. WestRiver will kick in up to time, without further publication. $25 million of the total equity. Interested parties who would like additional information Zabik is senior managing director of RiverStone, which he regarding the Collateral and the terms and conditions of the formed in 2008. He previously was portfolio manager of a Sale (the “Terms and Conditions”) should visit the website high-yield-debt fund sponsored by GSC Partners of Florham www.herrick.com/ emeraldmezzownerinterestsdescription (the “Website”). Secured Party reserves the right to post Park, N.J. Before that, he was a senior member of BlackRock’s additional terms and conditions to the Website. For further real estate debt group. Gregory Breskin is the fund’s head of information contact counsel for Secured Party, Herrick, origination and acquisition. He previously worked at Feinstein LLP, 2 Park Avenue, New York, NY 10016, Attn: Brookfield Real Estate Financial Partners. Gary F. Eisenberg, Esq., at 973-274-2055 or by email at Westmont, of Mississauga, Ontario, owns or manages more [email protected]. than 400 hotels worldwide. This is the company’s first debt fund. O Waterstone Asset Management announces its new S&P Special Servicer Rating.

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Prime Finance Holds First Close tives. They had longstanding relationships with Prime Group and its controlling investors, John Atwater and Daniel James. Fund operator Prime Finance has raised $220 million of ini- All five are principals for Prime Finance’s fund series. O tial equity for its second high-yield fund, which will have a larger focus on originations than the predecessor vehicle. Canadian Fund Seeks US Investors The New York shop began its marketing campaign in the fall, seeking to line up $400 million overall. The fund, which Canadian fund operator Trez Capital is soliciting capital held its first close a few weeks ago, is one of the few that has from U.S. investors for the first time. made headway in recent months amid a broad pullback by The Vancouver shop is seeking to raise C$200 million ($210 investors. million) of equity for a fund that would originate mortgages on The vehicle, Prime Finance Partners 2, will shoot for a Canadian commercial properties. return of about 15% by employing the same broad strategy as Trez has traditionally lined up capital from Canadian its $200 million predecessor. It can originate or buy senior or investors, especially pension systems. But it now also hopes to mezzanine debt, and can also invest in preferred equity. lure diversification-minded U.S. institutional investors by Fund 1, which closed in 2008 and is fully invested, empha- playing up the relative stability of the Canadian commercial sized the acquisition of performing debt. The new vehicle is property market. likely to tilt more toward originations. It has a seven-year hold Several other Canadian fund shops have broached period, two years longer than its predecessor. That means it American equity for the first time in the past year, including will be able to target longer-term investments. Prime Finance Conundrum Capital and GT Canada, both of Toronto. It’s too can use leverage, but did so sparingly with its first vehicle. soon to tell if they are making any headway. The company is backed by Prime Group, a San Francisco The Trez vehicle, called Trez Capital Finance Fund 2, will property firm that owns or manages some 20,000 apartments. shoot for a 10-12% return by writing senior and subordinate Prime Finance sources and manages its investments, and loans, including bridge loans. Most of the loans will be backed Prime Group handles most of the back-office duties. by properties in the western part of Canada. Prime Finance was founded in 2008 by Scott Douglass, Trez, which plans to hold a first equity close in the second Steve Gerstung and Jon Brayshaw, all former Natixis execu- quarter, has lined up a C$25 million soft commitment from Alberta , one of Canada’s largest pen- sion systems, with C$69 billion of . The fund charges a 1% management fee. After investors VENTRAS SEEKS QUALIFIED receive a 9% preferred return, Trez is entitled to 20% of addi- SPECIAL SERVICING PROFESSIONALS tional profits. Robert Perkins is executive vice president for mortgage funds. Vice president Mario Abreu works on raising Ventras Asset Management LLC, a commercial real estate capital. asset manager specializing in the management and Morley resolution of loans and REO, and Ventras Capital Advisors, Trez, which was founded in 1997 by chief executive an SEC registered investment adviser with over $4.2 billion Greene, has some $500 million of assets under management. in commercial and residential assets under management, Its first closed-end fund, Trez Capital Finance Fund 1, com- continue to expand operations in Denver, CO and pleted raising C$100 million in 2007 and is fully invested. The Philadelphia, PA. Ventras Asset Management is seeking shop also operates several open-end lending funds. O candidates with the following expertise:

Asset Managers with a minimum of 5-7 years experience Fitch Unit Revamps Valuation Model managing and resolving non-performing loans and REO properties for a rated special servicer. Algorithmics Credit Advisory, a Fitch subsidiary, has retooled its loan-valuation service. Loan Administrators with a thorough understanding of CMBS The key change is that users can now create customized val- Pooling and Servicing Agreements, as well as the operational uations for whole loans and commercial MBS based on prop- and legal framework governing the activities of rated special erty-specific data, rather than macroeconomic projections. servicers. Loan Administrators must have a minimum of 3-5 Likely clients include community and regional banks, years experience working for a rated special servicer. companies and other institutional lenders and Please email a cover letter listing salary requirements and investors. willingness to relocate to The valuation model was developed by a team led by senior Philadelphia or Denver, as well as director Krishnamoorthy Narasimhan. Algorithmics has tested a resume to [email protected]. the revamped product with a few select clients for several We will only contact the candidates weeks and will formally roll it out next week. deemed qualified. The Toronto firm was formed in 1989 and acquired by Fitch in 2005. O February 26, 2010 Commercial Mortgage ALERT 7

Spring ... From Page 1 PERFORMING & NON-PERFORMING NOTES estate debt and equity. The firm also provides advisory servic- es and is in the process of setting up a commercial-property fund. White said the three-prong strategy differentiates the company from a slew of other broker-dealers that have cropped up during the credit crunch. Its advisory clients in the commercial real estate sector www. AUCTION.com include insurers, regional U.S. banks and large European ALL LOANS TO BE SOLD INDIVIDUALLY banks that need help evaluating and managing their invest- ments in distressed CMBS, CDOs, mortgages and properties. NON-PERFORMING LOAN AUCTION | BID ONLINE: MARCH 15TH - 17TH CITY / PROPERTY UNPAID STARTING LOAN SALE LSA Spring Hill also works with special servicers and CDO man- STATE TYPE SIZE BALANCE APPRAISAL BID ADVISOR PHONE agers to restructure or liquidate troubled loans. Anaheim, CA ...... Industrial ..... 2,856 sf ...... $503,910 ..... $695,000 ... $100,000 ..... Baker Morphy ....949-885-2930 On the fund side, Spring Hill expects to start raising $250 Colton, CA ...... Mixed-Use ... 10,994 sf ...... $663,067 ...... $520,000 .....$100,000 ...... Ryan Dunigan .....858-410-1218 million of equity for its debut vehicle in April. With leverage, Dinuba, CA ...... Hotel ...... 18,384 sf ....$1,526,990 .... $1,125,000 .....$400,000 ...... Ryan Dunigan .....858-410-1218 the fund would have $500 million of buying power. The man- Hollister, CA ...... Retail ...... 1,975 sf ...... $205,204 ...... $200,000 ...... $50,000 ...... Ryan Dunigan .....858-410-1218 ager is shooting to close on its first round of equity by Oakland, CA ...... Mixed-Use .....4,875 sf ...... $386,650 ...... $565,000 .....$100,000 ...... Ryan Dunigan .....858-410-1218 San Diego, CA .....Mixed-Use .....4,393 sf ....$1,355,415 .... $1,600,000 .....$300,000 ...... Ryan Dunigan .....858-410-1218 September, which would allow it to start putting capital to Santa Ana, CA ...... Office ...... 3,312 sf ...... $285,108 ...... $700,000 .....$100,000 ...... Baker Morphy .....949-885-2930 work by yearend. Tracy, CA ...... Retail ...... 26,600 sf ....$2,484,073 .... $4,010,000 .....$900,000 ...... Baker Morphy .....949-885-2930 The fund would buy full or partial stakes in properties, Keizer, OR ...... Multi-family .... 21 units ...... $684,168 .... $1,135,000 .....$300,000 ...... Baker Morphy .....949-885-2930 sometimes with partners. It would also buy commercial mort- Dallas, TX ...... Multi-family .... 80 units ....$1,435,080 .... $1,480,000 .....$400,000 ...... Conley Covert .....214-438-6393 gages or CMBS with an eye toward taking over the collateral. Dallas, TX ...... Retail ...... 23,886 sf ....$1,207,809 .... $1,250,000 .....$400,000 ...... Conley Covert .....214-438-6393 Fort Worth, TX ....Multi-family .... 22 units ...... $526,428 ...... $410,000 .....$100,000 ...... Conley Covert .....214-438-6393 Before forming Spring Hill, White was a managing director in the area at Lehman Brothers for many years. PERFORMING LOAN AUCTION | BID ONLINE: MARCH 15TH - 17TH Many Lehman colleagues have joined him at Spring Hill. In his CITY / PROPERTY UNPAID STARTING LOAN SALE LSA last role at Lehman, White was responsible for unwinding the STATE TYPE SIZE BALANCE APPRAISAL BID ADVISOR PHONE investment bank’s holdings of commercial properties, CMBS Bethlehem, GA ....Industrial ..... 12,865 sf .... $388,934 ...... $565,000 ... $100,000 .....Jim Gladden .....202-719-5706 and other structured products. He previously headed the glob- Bishop, GA ...... Land Only ..157.88 acres ...$4,462,500 ....$4,173,000 .....$500,000 ...... Justin Bates ...... 404-995-6514 al securitization syndicate desk, including CMBS coverage. O Conyers, GA ...... Residential ...... 3,185 sf ..... $226,134 ...... $328,000 ...... $50,000 ...... Jim Gladden ...... 202-719-5706 Conyers, GA ...... Retail ...... 3,600 sf ..... $715,303 ...... $900,000 .....$250,000 ...... Justin Bates ...... 404-995-6514 Conyers, GA ...... Industrial ...... 17,264 sf ..... $845,091 ....$1,080,000 .....$300,000 ...... Jim Gladden ...... 202-719-5706 Brevan ... From Page 1 Decatur, GA ...... Multi-family ...... 8 units ..... $315,722 ...... $764,000 .....$100,000 ...... Jim Gladden ...... 202-719-5706 Hiram, GA ...... Retail ...... 24,207 sf ...$2,500,000 ....$4,200,000 ...... $70,000 ...... Justin Bates ...... 404-995-6514 structured-product holdings and its previous efforts to ramp Lawrenceville, GA .Industrial ...... 5,908 sf ..... $300,289 ...... $360,000 .....$100,000 ...... Jim Gladden ...... 202-719-5706 up U.S. investments. The firm hired senior trader David Lawrenceville, GA ...Retail ...... 1,750 sf ..... $773,763 ....$1,100,000 .....$300,000 ...... Justin Bates ...... 404-995-6514 Lithonia, GA ...... Hotel ...... 71 rooms ...$4,836,500 ....$5,300,000 .....$200,000 ...... Jim Gladden ...... 202-719-5706 Warren, also from Morgan Stanley, in early 2008 to build a U.S. Loganville, GA ...... Office ...... 3,410 sf ..... $213,493 ...... $286,500 ...... $50,000 ...... Justin Bates ...... 404-995-6514 team focusing on similar investments. That unit was spun off Loganville, GA ...... Office ...... 3,000 sf ..... $301,797 ...... $315,000 .....$100,000 ...... Jim Gladden ...... 202-719-5706 last June as DW Investment Management of New York. Loganville, GA .... Land Only .....9.93 acres ...$1,043,858 ....$1,290,000 .....$300,000 ...... Justin Bates ...... 404-995-6514 Khan, 28, rose in the ranks quickly after joining Morgan Loganville, GA ... Residential ...... 3,130 sf ..... $305,081 ...... $423,000 ...... $50,000 ...... Jim Gladden ...... 202-719-5706 Stanley’s CMBS trading desk in New York in mid-2003. He is Madison/Monroe, GA ..Mixed-Use ...... 3,024 sf ..... $678,226 ....$1,040,000 .....$300,000 ...... Jim Gladden ...... 202-719-5706 best known for CMBX trading, though he handled cash-bond Snellville, GA .....Residential ...... 2,124 sf ...... $99,746 ...... $195,000 ...... $20,000 ...... Justin Bates ...... 404-995-6514 trades as well. Morgan Stanley promoted Khan to head CMBS trader in the U.S. four years ago. Last June, he was elevated to co-head of UPCOMING AUCTIONS structured-product trading. As part of the shift, Khan assumed oversight responsibility for CMBS trading and was replaced as Mar. 2-4 Commercial Real Estate Auction head CMBS trader by Kevin Ng. Khan reported to Steve Mar. 15-17 Performing and Non-Performing Note Auction D’Antonio, global head of securitized product sales and trading. Mar. 15-17 Commercial Real Estate Auction It’s unknown whether Morgan Stanley plans to name a replacement for Khan. The other co-head of structured-prod- SIGN UP FOR CUSTOMIZABLE EMAIL ALERTS uct trading is Jay Hallik, who specializes in residential MBS. FREEREQUEST A BROCHURE @ www.AUCTION.com FREE The other traders on Ng’s team are Zak Fischer, who handles To sell your Commercial Real Estate or Note Portfolio contact [email protected] senior CMBS; Dylan Korpita, who trades subordinate paper; WWW. .COM Andrew Day, who concentrates on commercial real estate AUCTION DETAILS • FREE BROCHURE • FULL PROPERTY LIST Real Estate Disposition, LLC, 1 Mauchly, Irvine, CA 92618. CDOs and interest-only paper; and Michael Kreicher, who For licensing information visit www.AUCTION.com/licensing. focuses on CMBX swaps. O Endless Opportunities Relentless Competition Assure your advantage in real estate finance and securitization

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Seeks Loanro m ortfolio f il- ffice p n $4 b ortfolio,ant o e tha i r mor o buy a g ng fo s, delivers the lowdown you need to anticipate eed t hoppi nth mo y Wins Beaconhas agr P nd is s ecent lds a artners illion a tor in r fund ho t $5 b pera unity letely Broadw ou und o pport mp ay Real Estate fPor ab tion. ston f d o oadw artners nsac o n’s thir al will co Br omrom the B eaco ee nance the tra r t B e feet. The de ast thr Beacon Capital to Pfi urliochase f fil- takes tha uar t le or a 2007 f debt uge ptfo rtial s n sq ong a tes f Y 16, US lion o coSeeksnd h oLoanrll or npa $4 b e am andida AR ts se g fu ing 10s ,milliound. g c eenwich WORKS: In i ufyinfice p re thapass th n f t packag adin rk- money-making situations and avoid dangers FEBRU IN THE ay is b m n illio , RBS Gr w Yo w t o t $1 b e DEALS Broad ianertiesor moenco f that mo ldsvide the debeen made. Le s to N g CMBS king LA Project ortfolio,rop g f gs o cen o di ely n’t b gan Stanley unnin 9 y a g pin ldin e ted utnd holetn has Mor est lender n in b u15 pop ec ty f cispio others, igg eaco man Lenders Bac to windh the ho or in r m . Also in theise dr B Ger ett City Loan ed un way ist exprtuniinal de ee e been the b wlor adv age 13 2 e nd is Bsroad peraugpho a f Lehman sBr hav Scott La AY on P Vie for Starr tho p al willude co t thr r a stor gan Stanley ADW n a nds, oal d o al incl as o inve Mor See BRO 3 Finalists has agreetillio lender fu Thoset le lenderesd f by n and ing Substitution OptionWall Str ton e no’sf thir the de via. adet Broadwayldma Wins Beacon Portfolio, Seeks Loan artners t $5FEBRUARY b ospie c16, 2007et. WTheacho de ng a eenwichGo rk- e... Fannie Offer ou ion. eaco andfe , whicho aisndida he o 3 y Wins Beacont P t BCapitalre way m g c w YBroadwayg Real Estate Partners has agreed to buy a giant office portfolio from in the real estate debt markets. Savvy a or ab kagingsac the B ua road e a GoldmanRBS Sachs. Gr e outhern f n 9 mCMBS DEALS IN THE WORKS: US N gan Stanley Funding 14Repac ro es tha sq d B andadin , to Beaconunnin Capitaln Partners for about $5 billionf S and isn shopping for more than $4 bil- 5 Mor tak n base oup s eaco tfolio o uisitio oadw y Realeps artnersEstate CDOs, P hasevicing f Citigrt packag B or a rc tial2 sGerman Lendersnd.ar e Backing LA Project liond of agedebt 13 to finance thellio ntransaction. p gh its acq inanc- Br CWCapital Pr nce theu tra r u t lender ise i ou 6 oadw ina e p r pa ger 10 million f en made.gan Le Stanleyges Also inadv the rYIonn itsP second huge purchased thr from thertgage Boston f fund operator in recent months, Br o f ug sin illio e Mor ig . A uy a $3 bsume f mo t t ull o as 3 Finalists Vie ’fort b Starrett City Loanwlor s LatestADW Flipto b Goingas to llioMaguirn o Capmark Boostsnd Europeanh g f Serp $1 b vide then deb Broadwayeed is buyingoup full or partiali stakes that Beacon’st 19 in third opportunity fund holds 8Beacon fCapital deb co P yin m t to $2.5 b ou n o u tha o di n has others,een the b Seehas BRO agrin Blackstone15 propertiese... Grr uencompassingp 10 millionnd ab square feet. The deal will completely lio ho itsvia se Gives Line to CDOf Play3 tFannieio OfferingBlackstone’ Substitutione b Scott OptionLagan Stanley t ing fherno geles a WacIn ay is b ties encogs. Hotel o t eRecapd cis v tor MorProperties gs tha hopp ut n s, 8 w ercks Calif ec s ha es nde uildin unwindd is s theo holdingsitio of that $1 billion fund. r lender ia oBpa ldin Lehman Br v Maguir ice b an f S town Los An gula lenders and borrowers scour each issue 2007 US roadchov r inal5 deMorgan Stanleyy in Fundingn a 14 Wallff Street Broadwayuis is wnexpectednc- to divide tsthe re debt packageRBS among at least three Ba nia o operties i and 10 W ude d b or olio o gs in doina re of in 15 p ay is exph a f oldmaCalif lenders,rtf uildin its althoughacq a final decisionr mo hasn’tothers been made. Leading candidates for a Y 16, WORKS: wind thew ho ug Those lenderade G Equity Office Pr wo o b gh tgage f ne o THE BofAun Fundsroad NY Officetho Dealal incl for6 RamiusCWCapital Preps ofCDOs, Repackaging uirne pt pieceou ofr the deal oseinclude o LehmanLehman Brothers, Br Morgan Office, Stanley, RBS Greenwich AR IN 10 B via. llio f mo o chout 19 in ohypo, uity f king LA Project he Shopss, al CMBS Deal in UK ing. e will acqi d thrCapitaleandcted Wachovia.t o EurThose lenders have fbeen Eq the biggest lenders to New York- f the Wdeacho which8 Capmark is he Boosts Europeanaguir Servicing me n o s, gs o out half o FEBRU DEALS 10 Deutsclender ers yFeast, on Deals M unty. su illio editnd abSuisse, ldin ett City Loan ece o and wa Goldman Sachs. o as basedica, Broadway,Cr which is fheaded the ho by investord to sell abScottenstein Lawlor. Also in the running CMBS eet pi ad uy a $3 gelesb REIT is expeles a r lendernyRBS o ee , Shor ess 9 ved CMBS Buyro and8 Wachovia Gives LineOrange to CDO b C Playeroup o $2.5 b are Citigroupg and gGoldman ma Sachs.ady agrGoldmanoston and MorganFortr Stanley advised Beacon all Str 11 Star Capital o p Banct of Amer egulapin and e of B man Lenders Bac W d B oup iott d tThe Los An f flip has alr and age 11 Ger Vie for Starr ee ouder u s o ts r n. It ice,artners on P See BROADWAY on Page 13 2 base Citigr ida Marr g f roces f i iothersllio f f operties for tips that are timely and sophisticated. ing Substitution Option kaging Agencies ate Odds Over 10RatingsWachovia Plans Latest Backs Calif. Flipwhich Hotel i ninclGoingRecap toown Maguir Los An re o y Of e Pr GUIRE 11 Blackstonep Gr t or $39 b t See MA Finalists ar has agrt oeenwichp Capital.wn iday f Beaconui Capitalf Macklow P 3 Repac Grh tone is in thet F rpr mo th Eqm o ut half o vicing MetLife Lends on Flor10 BofA Funds NYgs thaOffice DealB forlacks Ramius ed las e o Lehmanals wi Br fea o enstein 11 nd is s uir n Blackstone’rate de d thegs ot s Latestess Flip GoingDeal to Maguire... Fannie Offer er opertiesildin a gs tin acq do n sell abShor 3 eps CDOs, u ose o ohypo,cisco a ldin o , Fortr gan Stanley Funding 14 10e DeutschePr Shops CMBS uDealwhichildin in i UKfolio via sepaEurran d t age 11 oduce a Mor Blackstone’fice b operties ort o cho n F Maguire Propertiesee oston hasand agreed to buy a $3 billiono pr portfolio of Southern 5 f wo b the p d t of Sa the ho B on P ther Maguir e t te California of y agrofficeof buildings that Blackstone Grnoup trackassumed t ny througho its acquisition rnia11 Starved o CMBSn Buyers FeastPropertiese con Deals y ad GUIRE is o e as a CWCapital Pr o orga uir edit Suisse, n e operties rg 6 .P. M Cr maof Equityartners Office Properties and is shoppingoperties ice for as up la to $2.5 billion of mortgage financ- . Hotel Recap Calif ed J eal ng has alr e Pr See MA n tw Bear Capmark Boosts European Ser THE GRAPEVINEEquity11 Agencies Office rPr it sat r Odds Overa Ratingsica, Plan pi Iting. er Spurs $15 BillionDeal tha CMBS and 8 via Gives Line to CDO Play hasof hir feo will yacq. Lee, lip n. ov f Equity Office Prre duce a ica debt ho ks Calif g. tns. f f llioke Macklow ro her te ac Charlesin aLeeguireroauntio geles lREIT is exp s o ia Maguiref urchase will o acquirepril —two mo buildings p int downtown Losting-ra Angeles and about 19 in W FREEDeutsche Bankran 11MSMetLife op Lendsl r eona Florida Marriott o s p arly A o ny Banco of Amer floa 8 via Bac ete B cia ...Asces TBeacon oup’Capital P y e n ho v d CM mer Bancire ofc- Amer ro or $39 b eamOrange County.n b illio or ac Chase O an l com ng d y f th tizatio track et as a Bear ts f W e CD gloOrangeba The C Losna Angudei ge ida Blackstone cGruri The Losg. Angeles REITy Goldmann is expectedr gSachs,f the $26.4to choose b onet or smoreignmen of its regular lenders, 10 estat the to ma r r als wid then se t fferin d b is o tion o and g as ers Feast on Dealsor in orts t F e de nillio which includeate Bancle of America,or ,te deb Eurohypo,ncin Lehman Brothersr and RBS BofA Funds NY Office Deal for Ramius irect , rep who is inne chay ise, in lasthe p t $15 b ndic r icep as la eek. ica ina Beacon CapitalC., fo 10 he Shops CMBS Deal in UKd roup which incl to ed ra cial MBS o y opertiesw last w or theg-ra f rgs. , D. aiottte g eenwichLainie Capital. Kauir nciscocommer a t-baGrnkeenwich s tize Capital. the senion t g f tin uildino gton il- Deutsc est an den Bol,Grand lacks . Lee ra h curi ttlin oa fice b ts f ashin r $5 b Emile v Os, B tiotn acqs is An eig o Blackstonese isBlackstonee thain the processre ba of f uilflippingty Of manynd Wof the holdingsing fo of Equity Office, 10 ved CMBS Buytrialida Marrtors te CTHED GRAPEVINEitiza lioer viae h sepan F plans t ided tor hops a f Enq ttle a orpp a r oh v Banc of Amer a h is in the al est secu n,r twf of Sans whichro it acquired last Fridayllion fori ollio $39 billion.esignmen It has alreadyo agreed to sell aboutts half of See for yourself why the newsletter is Star f re MBS whichorga io utio Stearns hat itEquity p Office Pr i ties in S nager is s enstein nce i 11 o s C . M xec f eral CMBSf $7.6s b per g as .C.,Shor f il- ina o run Deutsche at J.P Bankthed peahasl e hired J.P. Morgan the portfoliopril — mo via separate dealsro withu Beaconnd maBeacon Capital, CapitalDd Partnerst tofo fBoston,nksShorenstein Agencies at Odds Over Ratings Planwh ears ded operties packageer Spurs ntwhile, $15sev g salesBillion o f fiCMBSce p toncinn f gs. on deb 10 y nclu Pr nces. v Mecahase orly eAndin y 36f theo $26.4 bosina ncisco-basegt orn $5 o fb g the ba subscription!11 spent tChaseies i veteraneasaCharles Lee for itseo real ur eaPr’s poperties oo fb uSan Francisco and thera teamhin ofgillio Macklowf e tPropertiess n ageand 13 Fortress bili def p toyne edGoldman t n Sachs,o id the B nuildin F as $1i nb is inn. theAmo on P MetLife Lends on Flor onsi n oan k s lacks ey rtioyers saek. r thet. fSa n p illio VSeeER MAGUIRE on Page 11 resp gaiestateng l CDO and CMBS operations.a Lee,B an b has agr ola e e odeb ice b ds Wtha op nce Ai KEO 11 oarng l and oup’ tio d brkret p p t w gt f f tly lesn h r $1.2 b inaSee T nks d aMrr deairector a in the global commercialted realtizaPartnersg. a lasting-ralin y ligOfh e., fo ensteino f an P. r e, pec ri rin lliote n.le M loa tt ort s ttle a er is s t t ge 13 J. its Le Bear Stearnsre ex els cu ffe i a nd f qui ealand, Or Shor g the baa d r estates. ica, group, reportsth ...Asa to managingThot direc-$6.4 b ed- a re ba E ort nag d deb n on P e fo on al mon t on n se yndicf f...Asix inTakeoverg a lenderf f Spurs $15f Billion CMBS Deal ti reEmileextc - van den d eBol,b Blackstone Gr n otize theBlackstone senioct ps a n tieso in P n o VER has hir Bancer ofa Amertorsial n re n of who frillioom is in chargenk lios ri f sele ho rollioper erties innd S ma n. Amo op ill Lrynchc di bilelio ired cial MBS o cu cesds too 17 p i op fu illio AKEO recognized as the vital source for SMerr me of nrealeg $1 estate rg CDOs,acqu $15and b Lainiee Kaye,ht-ba sepro Blackstonen of Group’sr tonpurchasencisco-base of Equityillio Office Properties is on track to produce a iz o ide io a See T THE GRAPEVINEn CharlesMB Lee om uraigti oup t willmmer b g. s t ov uisit f $7.6 bice p os r n $1 b ra C l co secan who runs CMBS .co ferin lLeean racq $15 billionf fsecuritizationn F by early April — more than twice as large as any other ete nd ba t m ye, . The debed oAnf eigp t it p eral CMBS s s tha or $1.2 b Deutschev Bank a lo toat Blackstone Gr pool lying ha g sales oy 36 o id the Bt. Sa les DO e g rtsth whos pentis in cha 10 yearsee l isaton J.P. Morgan,upp where his commercialu MBS offering.ly e., f Chase C th o iStar Hospitality. L2 bihl i lso sStearns age o b s sa e deb ht te in rep Mer Lainieresponsibilitiesn nKa sa $ re includedsis a deal executionswhile, sevendind t Any ereight-bankt lig syndicate led by Goldman Sachs, Banc of America and Bear sta or p, nd edt iio he on packageea tn ’s p ee la g-ra r s land, Or e ct u , acludiza w uti M ne Stearnset p o rt ire gro an denO Bol,sin ritand arrangingn, ec loan defeasances. to rk tinplans to securitizeo the senior portion of the $26.4 billion floating-rate debt d te D cu rga ex See GRAPEVINE on Back P has agr a loa sta e C seCountrywideo al Financial lacks packagend f that it provided to Blackstone last week. e Emile vtat S . M de es. B n. M g a lenderties f in P es MB J.P Banced ofn America,c Bear Stearns andartnersillio d- a inMeanwhile,per several CMBS shops are battling for the financing assignments for tors al C at ud sa P ixe ct ro market leaders. Sign up for a re ns rs cl fea d f f of ru ea in Merrde ill Lynch nextand monthte are expected$6.4 b f seleBlackstone’s 17 p pending sales of $7.6 billion of Equity Office buildings. Beacon Capital ho 0 y ies n ec els n o s o f w t 1 ilit loa to securitize $1ex billionp ot of debt onlio hotels n oPartners has agreed to buy 36 office properties in Seattle and Washington, D.C., for en ib g e h roces itio sp ns gin Blackstone ar Group on m p po an thatBear Stearnsth bt ro acquired from uis $6.4 billion. Market players said the Boston fund manager is shopping for $5 bil- res rr on de d f e acq d a ica,MertiStar m Hospitality. of ire The debg.t will be lion of fixed- and floating-rate debt. San Francisco-based Shorenstein is in the an ex on qu rin includedn illi ina ac $2 billiont will fb fpoolede g offering. process of selecting a lender for slightly less than $1 billion of debt to finance its b d o yin ynchCountrywide $1 oup Financialle pl age Banc ofill Amer L ze The deboo uisp also supplying acquisition of 17 properties in Portland, Ore., for $1.2 billion. Among the banks iti . p o s Merr ur ion Seel sGRAPEVINE on Back Page See TAKEOVER on Page 13 three-issue FREE trial sec ill is a b to Blackstone Gr$2 at a th iStar Hospitality in ed See GRAPEVINE on Back P Mer lud inc subscription and discover how  YES! Start my 3-issue FREE trial Countrywidesubscription Financial to Commerical Mortgage Alert: COMMERCIAL MORTGAGE ALERT. There’s absolutely no obligation -- I won’t receive an invoice unless I choose to subscribe. LLL Tips you off to new NAME: directions in the worldwide COMPANY: CMBS business. ADDRESS:

CITY/ST/ZIP:

Spotlights conduit lenders, TEL:

banks and insurers battling E-MAIL: for mortgage business. Fax this coupon to: 201-659-4141 To order by phone, call 201-659-1700 Identifies the latest winners Or mail to: Commercial Mortgage Alert and losers in any of the 5 Marine View Plaza, #400, Hoboken NJ 07030 real estate debt markets. You can also start your free trial at CMAlert.com February 26, 2010 Commercial Mortgage ALERT 9

‘SF’ Suffix for Bond Ratings Closer Startup ... From Page 1 A separate rating designation for structured bonds — a step outcome because there are enough people chasing those deals. many investors fear amounts to a “scarlet letter” for such secu- Our proposition is to work our way into deals and create value. rities — is moving closer to implementation. If the servicer takes a property with 50% vacancy and tries to S&P and Fitch each said last week that they will add an “SF” sell it, he might get only 50 cents on the dollar. If he gets it suffix to their ratings on structured-finance products issued leased up, he can sell it for 80 cents. Then 24 months out, he around the world by September. Moody’s made the same can sell it for 90 to 100 cents.” announcement four months ago, with a possible midyear imple- The firm will also pursue advisory contracts from lenders mentation. and property owners. “I don’t see how this could be good,” said one commercial Ocean West will seek to raise capital from a range of domes- MBS trader. “It’s either neutral or bad.” tic and foreign investors, including wealthy individuals and The designation could cause logistical problems and hinder pension funds. It would manage the money via separate trading, according to Rick Jones, a partner in the real estate accounts, rather than by setting up a commingled fund, which finance practice at Dechert. For example, he said, pension would force the firm to lock itself into a specific yield target funds that are required to buy bonds with certain ratings may and deadline for multiple investments. shy away from bonds with the suffix. “For many it won’t mat- Miller will focus on loan workouts, sales and restructurings. ter,” Jones said. “But I guarantee you that some lawyer is going He had stints at J.P. Morgan, Merrill Lynch and Nomura, where to tell some entity that the ‘SF’ makes a difference.” he was a managing director and head of West Coast origina- Those portfolio managers would have to step away from the tions. He moved over to Centerline Capital in June 2008 as West market until they can realign their investment parameters to region head of dispositions when the special servicer acquired include bonds with that designation. That might be a time- part of Nomura’s real estate operation. consuming process requiring investor approval. Allegrette will work on acquisitions, dispositions and capi- The S&P and Fitch announcements took some investors by tal raising. He was formerly president of Maguire Investments, surprise. In November, the SEC officially tabled the idea, lead- an investment manager in Santa Monica. Allegrette oversaw a ing to the perception that the proposal was dead. But sweeping Southern California property portfolio and handled fund rais- rating-agency reforms adopted last April by the European ing and loan workouts. He previously was a managing director Commission, the executive arm of the European Union, includ- of Eastdil Secured. ed a provision that requires an additional symbol be attached Choi’s focus is financial analysis, due diligence and analyt- to ratings on securitized products that might wind up in the ics. He was a vice president of acquisitions, dispositions and hands of European investors. The rating agencies said that has financings at Maguire Investments. effectively forced them to add the designation to U.S.-issued Bischak will work on operations and property manage- bonds. S&P is soliciting industry feedback or questions on the ment. He was previously a senior vice president of asset man- issue until March 5. Responses should be e-mailed to ques- agement at Maguire Properties, a Los Angeles REIT not affili- [email protected]. ated with Maguire Investments. Before that, he worked at The regulation, coming in the wake of the financial crisis, is CommonWealth Partners, Tooley & Co. and Irvine Co. intended to warn inexperienced investors away from complex Swain will handle legal due diligence, loan and lease analy- instruments. U.S. traders and investors have scoffed at the idea sis, and loan modifications and foreclosures. He is a real estate as unnecessary. The Commercial Mortgage Securities and corporate attorney who previously worked at Gilchrist & Association has strongly opposed differentiations between var- Rutter of Santa Monica. O ious types of bond ratings, saying that it would create confu- sion and unnecessary work for investors. O Correction HUD Dealing $300 Million of Loans A Feb. 19 article, “LoanCore Seeks $500 Million for Loan Fund,” incorrectly said that Gary Berkman, chief credit officer The U.S. Department of Housing and Urban Development is of LoanCore Capital, previously had the same title at RBS. He offering $306 million of multi-family mortgages. was a senior credit officer at RBS. O Bids are due on March 24. The portfolio includes 25 multi- family loans, with collateral scattered across 14 states. The mortgages range in size from $1.6 million to $44.3 million. Planning Your Travel Schedule? Check out the most The offering includes one mortgage on a healthcare facility. comprehensive listing of upcoming conferences in real Investors can bid on individual loans. estate finance and securitization — in The Marketplace HUD is being advised by KDX Ventures, a joint venture section of CMAlert.com. Just click on “Conference between loan-sale advisor DebtX of Boston and KEMA Advisors, Calendar.” a boutique advisory firm in Hillsborough, N.C. O February 26, 2010 Commercial Mortgage ALERT 10

RECENT CMBS RATING CHANGES Feb. 18 - Feb. 24

S&P Current Most Fitch Current Most Balance Orig. Recent New Balance Orig. Recent New Class ($Mil.) Rating Rating Rating Class ($Mil.) Rating Rating Rating Banc of America Comm. A-M 196.2 AAA AAA AA- CBRE Realty Finance A-1 410.6 AAA AA CCC Mortgage Inc., 2005-5 A-J 120.2 AAA AAA BBB+ CDO Ltd., 2007-1 A-1R 45.6 AAA AA CCC B 41.7 AA AA BBB A-2 125.0 AAA A CCC C 19.6 AA- AA- BBB- A-2R 8.2 AAA A CCC D 36.8 A A BB+ B 86.5 AA BBB- CCC E 19.6 A- A- BB C 48.4 A+ B CC F 24.5 BBB+ BBB+ BB- D 19.2 A B CC G 27.0 BBB BBB B E 15.1 A- B CC H 24.5 BBB- BB+ CCC+ F 22.9 BBB+ CCC C J 12.3 BB+ BB CCC G 15.3 BBB CCC C K 12.3 BB B+ CCC- H 24.5 BBB- CCC C L 4.9 BB- B CCC- J 17.5 BB+ CCC C M 2.5 B+ B- CCC- K 16.0 BB CCC C N 2.5 B CCC+ CCC- L 9.9 BB- CCC C O 7.4 B- CCC CCC- GE Commercial A-J 149.1 AAA AAA AA CAM Commercial H 5.2 BB+ BB+ BB+ Mortgage, 2005-C2 B 14.0 AA+ AAA AA Mortgage, 2002-CAM2 J 1.0 BB BB BB C 30.3 AA AA A K 1.0 BB- BB- BB- D 16.3 AA- AA- BBB L 1.6 B+ B+ B+ E 25.6 A A BB M 1.0 B B B F 16.3 A- A- BB N 1.0 B- B- B- G 21.0 BBB+ BBB+ B X(IO) 86.6 AAA AAA AAA H 16.3 BBB BBB B- Merrill Lynch Mortgage A-M 307.4 AAA AAA AA- J 21.0 BBB- BBB- B- Trust, 2005-CKI1 A-J 234.4 AAA AAA A- K 9.3 BB+ BB+ B- B 53.8 AA AA BBB+ L 7.0 BB BB B- C 26.9 AA- AA- BBB Prima Capital CRE A-1 241.5 AAA AAA BBB D 53.8 A A BBB- Securitization, 2006-1 A-2 64.0 AAA AAA BB E 30.7 A- A- BB+ B 27.8 AA AA+ BB F 53.8 BBB+ BBB+ BB- C 22.3 A+ A+ B G 30.7 BBB BBB B+ D 16.7 A- A- B H 34.6 BBB- BBB- B E 18.1 BBB+ BBB+ CCC J 7.7 BB+ BB+ B F 12.5 BBB BBB CCC K 11.5 BB BB B- G 9.7 BBB- B CCC L 11.5 BB- BB- CCC+ H 13.9 BB B CCC M 3.8 B+ B+ CCC+ J 15.3 B B CCC N 7.7 B B CCC K 5.6 B- B- CCC P 11.5 B- B- CCC- TW Hotel, 2005-LUX A-2 36.0 AAA AAA A B 18.0 AA+ AA+ BBB+ C 21.0 AA AA BBB- D 10.3 AA- AA- BB+ E 13.8 A+ A+ BB F 14.0 A A B G 10.3 A- A- B- H 20.3 BBB+ BBB+ CCC+ J 15.7 BBB BBB CCC K 21.9 BBB- BBB- CCC- L 14.6 BB+ BB+ CCC- M 24.2 BB BB CCC- N 16.4 BB- BB- CCC- FebruaryJuly 9, 200126, 2010 COMMERCIALCommercial MortgageMORTGAGE ALERT 111

MARKET MONITOR

CMBS SPREADS

10YR, AAA SPREAD OVER SWAPS CMBS SPREADS OVER SWAPS 1,200 8,000 1,100 1,000 7,000 900 6,000 800 5,000 700 4,000

600 3,000 500 Current 2,000 400 6 months ago 1,000 300 0 200 Source: Trepp AAA AA A BBB BBB- 100 3/09 4/09 5/09 6/09 7/09 8/09 9/09 10/09 11/09 12/09 1/10 2/10 Spread (bp) Fixed Rate Avg. Week 52-wk (Conduit) Life 2/24 Earlier Avg. 5.0 S+202 S+204 +387 WORLDWIDE CMBS AAA 10.0 S+441 S+437 +633 AA 10.0 S+2,903 S+2,899 +3,434 MONTHLY ISSUANCE ($Bil.) YTD YTD A 10.0 S+3,508 S+3,505 +4,220 10 Category 2010 2009 2009 BBB 10.0 T+5,041 T+5,040 +5,923 US (TALF) 0.0 0.0 0.4 Dollar Price 8 US (Other) 2.2 0.0 2.6 Week 26-wk Markit CMBX 05-1 2/24 Earlier Avg. 6 US Total 2.2 0.0 3.0 AAA 83.5 84.2 81.2 Non-US (Central bank facility) 1.7 17.0 18.6 4 AA 30.9 32.0 33.1 Non-US (Other) 0.0 0.3 4.6 A 25.9 26.6 26.2 2 Non-US Total 1.7 10.0 23.2 BBB 16.4 16.5 18.2

0 TOTAL 3.9 17.3 26.2 BB 5.0 5.0 5.6 DJFMAMJJASONDJF Sources: Trepp, Markit

LOAN SPREADS CMBS TOTAL RETURNS

ASKING SPREADS OVER TREASURYS ASKING OFFICE SPREADS CMBS INDEX

600 10-year loans with 50-59% LTV Total Return (%) Month 500 Avg. Month Year Since As of 2/24 Life to Date to Date 1/1/97 2/19 Earlier 400 Inv.-grade 4.7 1.4 5.9 119.6 Office 283 324 300 AAA 4.2 1.2 5.0 126.9 Retail 284 326 200 AA 5.7 1.9 6.7 23.9 Multi-family 266 281 100 A 6.2 2.0 8.8 9.0 Industrial 271 312 Source: Trepp BBB 6.2 2.1 10.6 -5.9 0 Source: Trepp ASONDJF Source: Barclays

REIT BOND ISSUANCE

UNSECURED NOTES, MTNs ($Bil.) MONTHLY ISSUANCE ($Bil.) SPREADS Rating Amount Spread CDS 10 3 2/19 Maturity (M/S) ($Mil.) (bp) (bp) 9 Kimco 10/19 Baa1/BBB+ 300 T+255 210 8 7 Simon Property 2/20 A3/A- 1,250 T+230 165 2 6 2009 Equity Residential 6/17 Baa1/BBB+ 650 T+165 140 5 Prologis 10/19 Baa2/BBB- 600 T+340 238 4 2010 3 1 AvalonBay 3/20 Baa1/BBB+ 250 T+185 127 2 Duke Realty 8/19 Baa2/BBB- 250 T+335 228 1 Boston Properties 10/19 Baa2/A- 700 T+185 155 0 0 JFM AMJ JA SOND DJFMAMJJASONDJF Health Care Property 1/18 Baa3/BBB 600 T+315 200 Regency Centers 6/17 Baa2/BBB 400 T+240 Data points for all charts can be found in The Marketplace section of CMAlert.com Liquid REIT Average Baa2/BBB+ 556 T+250 183 Source: Wells Fargo February 26, 2010 Commercial Mortgage ALERT 12

hotel chain by issuing $4.1 billion of legislation in December. One CMSA- THE GRAPEVINE CMBS in August 2007. The Extended backed provision in the final House Stay plan was filed this week under bill would require lenders to retain a ... From Page 1 Chapter 11 of the U.S. Bankruptcy 5% stake, down from 10%. The House Barclays briefly before reuniting with Code. TriMont has scheduled a March legislation also allows CMBS lenders Wheeler. Amherst president Joseph 4 webcast to brief bondholders on the to fulfill the requirement by selling Walsh hired Wheeler to spearhead a terms of reorganization plan. To par- stakes to B-piece buyers. move by the Austin, Texas, firm into ticipate in the webcast, call TriMont’s CMBS sales and trading. Kate Floyd at 404-581-7593. Mary Beth Shanahan McCormick joined fund operator Rothschild Realty RAIT Financial is looking to hire its MetLife is looking to hire an associate Managers this week as a senior advi- first trader dealing only in CMBS. The director in its CMBS group. The sor. She is responsible for identifying, REIT, which operates on several fronts recruit, based in Morristown, N.J., reviewing and analyzing real estate in real estate finance, already had the would help make bond-trade recom- investment opportunities. McCormick capacity to take CMBS positions, but mendations. Applicants should have at previously directed real estate invest- demand for the product has picked up least five years of investment experi- ments for Ohio Public Employees. enough to warrant a full-time trader. ence, preferably with a background in Rothschild is a New York fund opera- The firm is looking for recruits with structured finance. tor that invests in both debt and equi- experience trading bonds and whole ty. loans, and it is willing to station that The regulatory-reform bill expected to staffer in New York or Charlotte. be introduced in the next week or so Gary Newman will join Holliday by Senate Banking Committee chair- Fenoglio Fowler’s Manhattan office Special servicer TriMont Real Estate man Christopher Dodd (D-Conn.) Monday as a director focused on plac- Advisors plans next week to advise would require lenders to retain stakes ing debt. He reports to senior manag- commercial MBS holders on the possi- in loans they originate for securitiza- ing director Mike Tepedino. Newman ble ramifications of a reorganization tion. The Commercial Mortgage previously worked at Hypo Real Estate plan filed by the owner of Extended Securities Association wants the meas- and has done stints at Barclays, GMAC Stay Hotels. Lightstone Group financed ure to reflect revisions made by the Commercial Mortgage and Lehman half of its $8 billion acquisition of the House before it adopted companion Brothers.

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