We announced at the MBA Commercial/Multifamily Servicing and Technology Conference in New Orleans that C-MISMO has authorized the creation of new standards for rent rolls and operating statements.
To better aid all CRE investors/lenders, we have reduced our focus on the CMSA’s CMBS-centered IRP 6 (which we support) to instead concentrate on establishing broader commercial real estate standards.
I was named Chairperson of the effort. We plan to have these standards finalized by the end of summer.
Setting a CRE standard while supporting IRP 6
If it includes full rent rolls and is adopted by the CMSA, IRP 6 will solve the transparency issues for CMBS deals.
However, getting IRP 6 approved and adopted is a big challenge, especially because the critical players (the servicers and the trustees) are resistant to making the required investment. Also, while IRP 6 has the potential to fix reporting for CMBS, it does not automatically fix the problem for commercial real estate lenders in general; the IRP has data and structures (bond level data, for example) that are not needed by portfolio lenders.
Therefore, MISMO is moving ahead with adopting standards for the two most critical missing pieces: rent rolls and operating statements. These standards will be identical to the “rent roll” and “operating statements” containers found in IRP 6, as both are based on the already-approved MISMO XML schema.
We think pushing ahead with independent C-MISMO rent roll and operating statement standards will not only solve a critical need for portfolio lenders, but will also help the CMSA with its adoption challenges, as the benefits of the transparency improvements will become evident and the servicers can start implementing the change.
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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.