I’m leaving Miami after attending the annual CREFC Investor Conference. The conference, now in its 25th year, is usually the best place to find out what people are thinking and get a prediction for the year. We had great weather, and a friend of mine hosted me on a nice-sized boat to cruise around Miami Bay — making the trip that much nicer.
With the recent volatility in the markets, I was expecting the conference to be much more negative than it was. While spreads have widened, the treasury rates have come in, reducing the impact on rates. The underlying loans being made now are way higher quality than the loans made in 2006 and 2007.
So, while there was definitely a cautious streak, most people feel that, if there is a recession, the impact in CRE and CMBS will be much smaller than the last dip. No one thinks real estate is going to cause the next recession. All in all, most people predict this year will be slower than last year, but the business will remain open and viable.
As for my conference, we found a few great enterprise software leads for Backshop, and I always enjoy spending time in Miami Beach.
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Jim Flaherty is CEO of CMBS.com and the creator of the Backshop loan origination system. He is a trained credit professional with experience installing enterprise underwriting systems for commercial real estate lenders, rating agencies and investors.