The Last 25 Years of CMBS: from Mega Deals to Miami Beach the Twists, Turns, Near-Misses and Memories of Building an Industry from Scratch

July 2019

CMBS Research

The Last 25 Years of CMBS: From Mega Deals to Miami Beach The Twists, Turns, Near-Misses and Memories of Building an Industry from Scratch

By Manus Clancy You might say, where there’s blood, there’s also rumor. The scuttlebutt in the CMBS industry was that some Heading into the summer of 1998, those who of the issuers were sitting on huge mark-to-market losses. The early issuers, like today, would warehouse helped create the CMBS market had every loans until they reached critical mass for bringing a deal reason to feel optimistic about the industry’s to market. They would hedge for interest rate risk, but future. The market was now several years old, spread-hedging was either non- existent or tricky. They also tended to warehouse for longer periods of time a number of banks had started “shelves” for than they do now, so the balance of loans on the firms’ issuing CMBS deals and the types of issues books would swell. had evolved from deals with just a few large As spreads blew out late in the summer of 1998, the loans to deals made up of hundreds of loans value of the loans being warehoused plummeted. The and balances totaling in the billions. spread widening was underscored by the miserable execution of Morgan Stanley Capital I Inc., 1998-CF1 (MSC 1998-CF1), which priced in August 1998 near the Lehman Brothers Commercial Trust, 1998-C1 (LBCMT height of the storm. 1998-C1), which amazingly still remains outstanding But the CMBS industry was not one to turn its back on more than 20 years later, was a case in point. It a good time, and Penner’s 1998 confab would go on in was issued in March 1998 and had 259 loans at the face of the tumult. securitization with a total balance of more than $1.7 billion. It wasn’t unique as other investment banks, The Father of CMBS including JPMorgan, Citigroup, DLJ, Credit Suisse First Boston, Merrill Lynch, Morgan Stanley and Goldman If Lewis Ranieri was the father of mortgage-backed Sachs, each had launched their own. Soon to follow securities and collateralized mortgage obligations, would be Bear Stearns, Prudential Financial, First Ethan Penner was the father of CMBS. Union, Deutsche Bank, Salomon Smith Barney, Paine Webber and Wachovia Securities. The beauty of residential loans, as far as securitization was concerned, was their homogeneity. There were By the time most of the industry assembled for CMBS no tenants to worry about; prepayment restrictions did pioneer Ethan Penner’s annual post-Labor Day fete not exist; borrower names could not be revealed; and that year, the CMBS market was already facing its first loans had similar terms. An investor might know only existential threat. The Russian debt crisis that August a few pieces of information about a loan, its balance, had resulted in the collapse of Long-Term Capital rate, whether its coupon was fixed or floating, its term, Management. The hedge fund buckled the following location of its collateral and the property type. There month and a consortium of 16 banks cobbled together wasn’t much more than that. more than $3 billion in bailout funds to keep the LTCM default from turning into a financial market epidemic. As Things were messier in the CMBS market. The one CMBS Founding Father said at the time, “there’s Resolution Trust Corp. (RTC) was started in the late blood in the water.” 1980’s to help liquidate assets the federal government

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had inherited from failed savings and loan institutions. The 1998 version of Penner’s gala was not lacking in star The market for securitizing residential loans had been power. Even as the foundations of the CMBS market established years before the S&L crisis with the issuance rocked, nothing at the San Francisco party hinted at the of MBS and CMOs. concerns. Comedian Bill Maher hosted the opening session. Other guests included former Presidential The same couldn’t be said for commercial mortgages. candidate and later California governor Jerry Brown, as well as San Francisco Mayor Willie Brown. The first night’s dinner entertainment was provided by Diana Data for the sector was considered Ross. On night two, Robin Williams served as the warm- lumpy, idiosyncratic and incomplete. up act. He’d be followed by Joni Mitchell, Stevie Nicks, Don Henley, Michael McDonald and Gwen Stefani, Nonetheless, the RTC found success among others.

creating securities backed by these You could say that the San Francisco blowout was the “noisy” assets. end of phase one of the CMBS market. Nomura would suffer a $2 billion quarterly loss, but it wasn’t alone. Others, who entered the market because of the sizable Data for the sector was considered lumpy, idiosyncratic profits to be had, took a beating as well. and incomplete. Nonetheless, the RTC found success It would not be the last time the market would face creating securities backed by these “noisy” assets. adversity and certainly not the first time the industry’s That gave Penner his opening. But credit for the structural resilience would be called into question. With that nuances of CMBS must go to the RTC. Its deals included introduction, we offer up a 25-year retrospective of the both a master and special servicer, for instance, which CMBS industry—the highs, lows, mistakes, innovations, became a staple of CMBS deals. near-death experience and revival.

Some of Penner’s early deals came with the moniker Phase I – 1994-1998: The Early Days “mega.” The deals contained a small number of large While Ethan Penner was at the center of the founding loans— hence the “mega” name. The first such deal of CMBS, he was hardly alone. Lehman Brothers and was Nomura Asset Securities Corp., 1994-MD1, (NASC Credit Suisse First Boston were also aggressively 1994-MD1). Others could lay claim to having done the building teams to support the new financing vehicle. first CMBS deal, but earlier deals were either single- asset or single-borrower transactions. NASC 1994-MD1 The early deals were tricky for several reasons. First, was backed by nine loans against properties owned the data was messy. Issuers struggled with how to by different sponsors. It was the first private-label, represent lockout provisions. Even stickier were yield multiple-borrower transaction. Despite having only nine maintenance calculations. No two calculations seemed loans in its collateral pool, the deal was structured with to be the same— and describing the nuances in a 15 bond classes. prospectus was burdensome.

Profits from early CMBS deals were sizable. After all, Interestingly, some of the early Nomura deals included few lenders were actively competing for loans. Penner extremely intensive calculations. In an effort to accurately used some of those profits to throw terrific parties that distribute yield maintenance charges, the calculation are still talked about today. At one event, he talked the called for all bonds’ cash flows to be projected, first Eagles rock band into reuniting for the entertainment assuming the prepayment did not take place and then of his audience. He would raffle off cars to lucky assuming the prepayment of the loan. The difference winners. Bob Dylan would be coaxed into singing for the in cash flows between the two scenarios would be commercial real estate “man.” discounted and served as the basis for distributing yield

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maintenance. As a result of the complexity, a prepayment confidence to the fledgling market that intricate deals scenario could take 20 minutes to calculate. The method such as this could get issued. was noble, but impractical for traders. It was phased out after a few deals. One sign that the CMBS market was ready for prime time was that Jack Kemp, then vice presidential Then came the issue of how much could be disclosed— nominee, was tapped as keynote speaker at the Tenant names? Borrower names? Lease expiration industry’s 1996 conference, just two days following that dates? Net operating income? Occupancy? year’s presidential election.

Money managers were hesitant to allocate a great Also advancing the market was the emergence of new deal of capital to the asset class because of the lack of data and analytic providers. Conquest and Trepp (which transparency and liquidity in the space. At the time, data owns Commercial Real Estate Direct) began to develop were transferred not by email, but through the distribution websites and data sources that were better contoured of floppy disks via overnight mail or messenger. to the nuances of commercial real estate. The tools gave investors better transparency into collateral data. They One of the most noteworthy contributions to the early also provided trading- quality data and models to bond evolution of CMBS was the formation of what then traders and developed analytical tools for investors, was the CSSA, the Commercial Real Estate Secondary allowing them to stress bond cash flows. Market and Securitization Association, which in 1999 changed its name to the CMSA, or Commercial Mortgage Issuers, trying to lure borrowers, briefly offered and Securities Association, and more recently to CREFC, or underwrote “buy down” loans. In a nutshell, a borrower Commercial Real Estate Finance Council. would make an upfront cash payment in exchange for a lower coupon, effectively buying down the interest The trade group was overseen by members from banks, rate. But that made the loans appear to have a higher rating agencies, servicers and CMBS investors, all of debt-service coverage ratio than they might have had whom were committed to putting the industry on a without the buy down. When investors discovered the strong footing. technique, the practice was quickly retired.

Among its early moves was the development in 1997 of One footnote of this era came as a result of the LTCM the Investor Reporting Package, or IRP, a standardized crisis. The first conduit deal larger than $1 billion was layout that would be adopted by all servicers and trustees issued in late 1996; the first greater than $2 billion came for purposes of updating monthly loan and bond data. exactly one year later; the first to pass $3 billion just The IRP still exists and is now in its eighth iteration. But four months after that. The industry would not see a $4 it was the early founders that established the protocols billion deal for another seven years. The lesson learned and the schematics upon which the industry was built. from watching big losses come from overstuffed The first version contained some 100 of the most important bond and loan property level fields. It’s grown warehouse accounts in 1998 led issuers to bring deals substantially since then to also include property and more quickly to market, rather than letting risk linger deal-level file standards. awaiting securitization.

Another important milestone was the issuance in 1996 Phase II – 1999-2004: Dealing With Externalities by Lehman Brothers of Structured Asset Securities Corp., 1996-CFL (SASC, 1996-CFL). The so-called The second phase of the CMBS market was dominated by ConFed deal included 558 loans—some fixed, some events outside the control of the commercial real estate floating—that had been on the books of the former industry. The bursting of the dot-com bubble followed by Confederation Life Insurance Co. The ability to securitize the terror attacks of Sept. 11, 2001 resulted in volatility, such a heterogeneous and sizable number of loans gave but they weren’t existential threats to the CMBS industry.

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From 2000 to 2002, the bursting of the dot-com bubble Important Moments in CMBS History resulted in a nearly 80 percent drop in the tech-heavy Nasdaq stock index. By itself, this did not force the ______CMBS primary market to become unglued. But the volatility in the market kept issuers on their toes. The MERRILL LYNCH MORTGAGE INVESTORS, huge collapse of the Nasdaq index led to lower interest 1996-C2 rates, however, which benefited borrowers, even as (MLMI 1996-C2) bond spreads widened. First Conduit Totaling More an $1 Billion in Loans (Closed: 11/25/96) More impactful were the 9/11 attacks. Once the nation ______began to emerge from its grieving, several questions had FIRST UNION-LEHMAN BROTHERS to be answered: Would Americans continue to travel by COMMERCIAL MORTGAGE TRUST II, 1997-C2 air as readily as they had in the past? Sadly, would large (FULB 1997-C2) office buildings, hotels and shopping centers become First Conduit Totaling More an $2 Billion in Loans soft targets? Could properties be insured against ______(Closed: 11/25/97) terrorism risk? The early reaction had the effect of suppressing NOMURA ASSET SECURITIES CORP., 1998-D6 issuance. In the wake of the 9/11 attacks, issuance came (NASC 1998-D6) to a standstill. Concerns about hotel loan defaults— First Conduit Totaling More an $3 Billion in Loans particularly from vacation destinations—spiked. Bond ______(Closed: 3/3/98) issuance stalled until questions about how properties would be insured against damage caused by acts of GS MORTGAGE SECURITIES CORP. II, 2005-GG4 terrorism were addressed. Congress the following year (GSMS 2005-GG4) passed the Terrorism Risk Insurance Act, opening the First Conduit Totaling More an $4 Billion in Loans door for property owners to obtain insurance against ______(Closed: 6/23/05) terrorist acts. CMBS issuance slowly re-emerged. The second Phase of the evolution of the CMBS market JPMORGAN COMMERCIAL MORTGAGE ended with the market finding its footing. FINANCE CORP., 2007-LDP10 (JPMCC 2007-LDPX) By 2004, optimism had returned and issuance grew. First Conduit Totaling More an $5 Billion in Loans Because of jitters from events early in the decade, (Closed: 3/29/07) the deals issued in 2003 and 2004 were underwritten ______conservatively and ultimately suffered only modest GS MORTGAGE SECURITIES CORP. II, losses compared to deals issued later. But the seeds 2007-GG10 for the next crisis were being planted. Without much (GSMS 2007-GG10) fanfare, mezzanine lending was starting to grow, giving Only Deal to See More an $1 Billion in Losses borrowers the ability to put more and more leverage on their properties. The securitization ______($1.24Bln - as of April) of those mezz loans—along with the securitization of COMM 2007-C9 non- investment grade bonds—began to emerge in late (COMM 2007-C9) 2003 and 2004. Leverage on senior loans also began 2007 Deal With the Smallest Loss Percentage to increase, as did the volume of loans that paid only (2.60 percent - as of April) interest for their full terms.

Source: Trepp

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Phase III – 2005-2007: The Go-Go Years layers of senior and mezzanine debt, as well as B-notes, they’d often have equity totaling less than 10 percent of If the years before the Great Depression of 1929 were a property’s value. That’s not even considering the often known as the ‘Roaring 20s’ can we call the stretch be- inflated appraised values of the time. If mark-to-market tween 2005 and 2008 the ‘Imprudent Aughties?’ valuations had been done in 2009, many loans from 2007 would have been found to have negative equity. Unlike with the dot-com bubble, commercial real estate was just about front and center for the Financial Cri- Of course, issuance took off as liquidity exploded. By sis of 2008. The subprime residential mortgage market 2007, total CMBS issuance peaked at $230 billion, a gets the top spot, but commercial real estate certainly record unlikely to be topped anytime soon. Newly is- was up there. sued benchmark CMBS bonds—those with the highest possible ratings and 10-year average lives—were being The era saw explosive jumps in property values, the priced at a spread of 25 basis points more than Trea- collapse of borrowing spreads, which further pushed surys or less. Spreads on BBB- bonds were regularly values higher, the growth of collateralized debt obliga- printing in the 70-bp range. And many B-pieces—com- tions, the introduction of synthetic CDOs, the start of prised of bonds rated BB- and below—found their way “pro forma” lending—that is, lending based on expect- into CDOs, which allowed B-piece buyers to leverage ed property income growth—and a sharp reduction of their investments and effectively sell off much of the borrower equity in properties. In fact, toward the end risk they held. of the cycle, because borrowers could line up generous

______Deals Over Time

• SEASONED/PORTFOLIO DEALS (popular from 1995- • MEZZANINE DEALS (2004-2007): CMBS deals backed 2001): Seasoned Deals from a single lender to sell off bal- by mezzanine loans. Similar to CDOs, but no revolving ance sheet loans by way of CMBS (see MSC 1998-HF1). lending period. Both now renamed CLOs deals.

• CREDIT TENANT DEALS (mid/late 1990s): Pools of loans • FRANCHISE LOAN (late 1990s/early 2000s): See EMAC where the collateral leases were backed by corporate enti- 1998-1, FLT 1998-I, FFCA 1999-2). ties, not the loan/property cash flow (see MLMI 1998-C1). • CANADIAN DEALS (1999-today): Issuance peaked • COLLATERALIZED DEBT OBLIGATION (2001 to from 2005 to 2007. 2007): Term no longer used in polite company. • SINGLE-FAMILY RENTAL (starting in 2013): Loans to sin- • REREMIC (2001-2008): Used to pool subinvestment gle-family homes that had been purchased and leased out. grade bonds (among other applications) to allow B-piece buyers to increase leverage and raise new proceeds for • COLLATERALIZED LOAN OBLIGATIONS (post cri- future lending (ReRemics still exist today, but not for the sis): Packages of transitional and mezzanine loans with purposes used prior to the financial crisis). relatively strict reinvestment and underwriting criteria, replacing the politically incorrect CDO term. • SMALL LOAN DEALS (2004-2007): Programs set up by banks to provide small-balance commercial real es- • EURO DEALS (peaked in 2006-2007): Evidence the tate loans. Popular with Lehman Brothers, Washington market has started to come back over the last two years. Mutual and Bear Stearns. • BRITISH POUND STERLING DEALS: See Euro Deals.

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Other markets were opening up as well, as there was it appeared the $225 million loan against the 1,228-unit issuance growth in Europe and Japan during this time. Riverton apartment property in Manhattan’s Harlem section would default. All of the property’s units were At the loan level, standards were loosening at every subject to New York City’s rent-stabilization rules that turn. These examples look reckless in hindsight, but limit annual rent increases. The sponsors, a venture were representative of commonly accepted practice in of Rockpoint Group and Stellar Management, set up 2006 and 2007: a large reserve to cover debt- service payments while they worked to bring rent stabilized units to market-lev- • The $1.22 billion of CMBS debt on the trophy office el rents. The pro forma DSCR on the loan was 1.73x, but building at 666 Fifth Ave. in Manhattan was under- that assumed successful transition of a large number written with a DSCR of 1.46x, but the in-place DSCR of apartments, which was not easy, as it would turn was only 0.65x. Lenders assumed in-place rents, out. The in-place DSCR was only 0.39x and the reserve which were in the $40/sf range, would eventually would run out in the summer of 2008, triggering the double as leases rolled. The loan defaulted in 2011, default—less than 18 months after the loan was secu- with a large portion of the original balance written off. ritized. • The $3 billion loan against the 11,241-unit Stuyves- Until then, many CMBS investors had not realized that ant Town/Peter Cooper Village apartment property in CMBS loans were being underwritten on a pro forma Manhattan was underwritten with an in-place DSCR basis. The news of the default rattled the CMBS market of well less than 1.0x and an assumption that the even more. The loan would ultimately suffer a loss of new owners could move a large chunk of the proper- nearly $107 million. ty’s rent-stabilized units to market rents. The senior loan against the property ultimately paid off in full. At The Riverton story was followed by countless other one point, the property’s value had declined so much defaults on loans that were underwritten at peak valu- that it implied a 50 percent loan loss. ations, with little equity and pro forma financials. The previously mentioned 666 Fifth and StuyTown loans • The Biscayne Landing loan was essentially a con- also defaulted. Large mall owner General Growth Prop- struction loan stuffed into CMBS. The project was giv- erties would file for bankruptcy as would Innkeepers en a $475 million valuation even though construction Hotel REIT. Office developers struggled to stay afloat. was only beginning. It was resolved at a total loss. Over time, the Trepp CMBS delinquency rate would top But as with U.S. stocks and residential housing at the 10 percent. Several loans were resolved with losses time, there seemed to be no peak in sight. north of $100 million. Phase IV - 2008-2010: The CMBS Ice Age Phase V - 2011-2019: The Comeback The lights went out on the CMBS market on June 27, The first sign of the CMBS market returning actually 2008. That was the closing date of Banc of America Com- came in late 2009 when JPMorgan Chase Commercial mercial Mortgage Inc., 2008-1 (BACM 2008-1), the last Mortgage Securities Trust, 2009-IWST ( JPMCC 2009- CMBS conduit deal that would get done for 21 months. IWST) and Banc of America Large Loan Inc., 2009-FDG The signs of a potential market demise came earlier (BALL 2009-FDG) were issued. The former, a $500 mil- that year as residential mortgage delinquencies spiked. lion, single- borrower transaction, breathed life into the Bear Stearns defaulted in March 2008 and fixed-income market. Backed by a pool of several dozen retail proper- spreads were gapping out across all assets classes. ties, it had a loan-to- value ratio of less than 60 percent. The hopes of CMBS desks everywhere were riding on One of the first signs that problems would not be limit- its shoulders. ed to the residential space came in August 2008, when

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The revival of the CMBS market was helped by the Term The strong growth—albeit from a modest base—that- Asset-Backed Securities Loan Facility, or TALF, program. took place from 2011 to 2013 gave way to more modest The liquidity facility, which was announced in Novem- growth in the middle of the decade. Issuers, originators ber 2008 and kicked off a few months later, opened up and investors remained busy as $90 billion of bonds trading in CMBS, which had been all but shut down. came to market in 2014 and about $95 billion in 2015. The program was closed for new loans in June 2010 as a result of the markets becoming sufficiently liquid. That time frame gave way to a new set of concerns for investors, however. At the height of the panic, in late 2008, the bellwether AAA-rated A4 bond of GS Mortgage Securities Corp. II, The Greek Debt Crisis forced spreads across the globe 2007-GG10 (GSMS 2007-GG10) was being quoted at a wider, leaving CMBS investors wondering if a new fi- spread of 1,500 bps more than Treasurys, which corre- nancial crisis was emerging. Investors also were left to sponded to a price of around $50. Many mezzanine and wonder what would happen to all the loans that were junior AAA bonds (AMs and AJs) were being quoted in originated in 2006 and 2007 when they reached their the $20 or $30 range or less. The TALF program began maturity dates in 2016 and 2017. The term “Wall of Ma- a march that would eventually lift the value of those turities” emerged as bondholders pondered just how bonds back to par or better. While senior AAA classes big the losses would be on “legacy” deals once those avoided losses, some AMs and many AJ ultimately loans had to be refinanced. Many ultimately had their would suffer losses. terms extended, while others suffered sizable losses.

To be sure, the comeback was slow, with 2010 see- The first signs that e-commerce could weigh on brick- ing about $12 billion in total private label issuance—a and-mortar retailers began to emerge in 2016. The col- fraction of what had been issued in 2007. In addition, lapse of oil prices raised the specter of defaults on Hous- many of the loans issued in 2006 and 2007 remained ton office loans, as well as multifamily and hotel loans outstanding and in default—a constant reminder to in- from North Dakota to West Texas. Retailer bankruptcies vestors of the risks in commercial real estate. of all sizes started to crop up—from Sports Authority to Toys ‘R’ Us to Sears and several dozen others. Cracks in The new decade brought work back for a great many. For the student-housing market began to appear. Grocery originators and issuers, new lending—while not coming store chains, normally considered beyond the reach of close to the go-go years of 2006 and 2007—continued e-commerce, began to see defaults and store closings. to grow. Private-label CMBS issuance grew to $80 billion in 2013 from roughly $30 billion in 2011. Special servicers Late 2016 introduced one of the last challenges to the aggressively dealt with the mountain of distressed “comeback” era. The Dodd-Frank era legislation man- CMBS loans and foreclosed properties. Distressed as- dated that CMBS issuers had to keep “skin in the set buyers found plenty of places to play in the debt and game” by retaining at least a 5 percent stake in any equity markets and savvy CMBS investors that bought new CMBS deal. The stake could be held by B-piece during the panic watched values steadily increase. buyers, but they’d be restricted from leveraging, hedging or selling their positions, essentially for the life of a Many CMBS pros that had been in the industry from deal. That introduced a new wrinkle to issuers. the beginning, worked again to help add even more transparency to data supplied by borrowers through For a stretch, it appeared that the mandate might bring trustees and servicers. Primary issuance spreads were the CMBS market to another halt and many feared that much higher than in 2007, better reflecting the credit the CMBS market would witness another hibernation. risks of commercial real estate. AAA bonds were struc- The theory had merit. It was anticipated that B-piece tured with more credit enhancement than in 2007 and buyers would need significantly greater yield compen- loans were underwritten much more conservatively. sation to meet the mandate, making CMBS less competitive compared to other lending sources like banks

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and insurance companies. What wasn’t expected was 10 LARGEST CONDUITS OF ALL-TIME that bond investors, particularly those high in the capital DEAL BAL ($BLN) stack, would pay up for bonds from deals subject to the risk-retention rules. Those tighter spreads kept CMBS WBCMT 2007-C30 7.92 competitive with other lending sources and the indus- GSMS 2007-GG10 7.56 try dodged another bullet. CD 2007-CD4 6.64 GCCFC 2007-GG9 6.61 As has been its tradition, the industry continued to inno- vate throughout the post-crisis comeback. New types WBCMT 2007-C31 5.85 of loans were created and securitized. Non-performing JPMCC 2007-LD11 5.41 loan deals started to emerge as did issues backed by JPMCC 2007-LDPX 5.33 single- family rentals. The latter came as a response MSC 2007-IQ14 4.90 to the need to recapitalize underwater single-family JPMCC 2006-LDP9 4.85 homes from the financial crisis. CGCMT 2007-C6 4.76 Also appearing were commercial real estate collateral- Source: Trepp ized loan obligations as another financing vehicle. far more liquid than it ever was. The market has seen The post-crisis period also saw enormous growth a number of innovations, many the product of sweat among the government-sponsored enterprises, or equity rather than lightning-bolt inspiration. Of course, GSEs, in direct multifamily lending. The surge, which there have been several near misses. Some might say began immediately after the financial crisis, was a re- the market has been lucky to survive 25 years. But as sponse to the shutdown of the private-label CMBS Branch Rickey, the legendary Brooklyn Dodgers general market in 2008-2010. Prior to the crisis, the GSEs had manager, once said, “luck is the residue of design.” participated in multifamily lending by purchasing “multifamily directed” CMBS bonds, their A-1A classes. We think that applies well to the CMBS market, which Meanwhile, the agencies, Fannie Mae and Freddie has been at the forefront in reporting timeliness, con- Mac, developed their own securitization platforms. As sistency and transparency. The early efforts to establish a result, CMBS would never recover its lost multifam- these standards served the market well during the vari- ily lending market share. Multifamily lending remains a ous dark times. Investors trusted the industry to come smaller part of recent vintage CMBS than it was from up with new reporting standards in response to crises, 2005 to 2007. because it had always done so in the past. This type of forward-looking mindset has served the industry well Phase VI – 2020 and Beyond for 25 years and we believe the foundation has been put Over the last 25 years, the CMBS market emerged from in place for the market to continue to grow and thrive. scratch to provide an additional funding source for com- See you all at the Golden Anniversary! mercial real estate property owners, it has lowered the cost of borrowing and has made commercial real estate

For more information about Trepp’s commercial real estate data, contact [email protected]. For inquiries about the data analysis conducted in this research, contact [email protected] or 212-754-1010.

About Trepp Trepp, founded in 1979, is the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency and investment performance. From its offices in New York, San Francisco and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance and portfolio management. Trepp is wholly-owned by Daily Mail and General Trust (DMGT).

The information provided is based on information generally available to the public from sources believed to be reliable. 10