I just returned from Santa Monica, CA where I attended the CREFC West Coast Summit to get an update on the market.
The main takeaway: The low rate, high value environment will likely stay for a while, but investors are weary because the cycle is so old.
There was talk of credit deterioration in the corporate bond market but not so much in the CRE markets. The thought is the disruption, when it comes, will be from a non CRE event. From a reporting standpoint, I learned they are pushing forward with an IRP package for CLOs, which is desperately needed, and I will follow that.
On a different note, I belong to the Golden Gate Yacht Club, and our most famous member, Larry Ellison, just hosted a sailboat race unlike any other. Our club’s affiliation with Larry and Oracle Racing go back almost 20 years — including winning the 33rd and 34th America’s Cup and defending the 35th America’s Cup. The book “The Billionaire and the Mechanic” details the story of how our financially strapped club partnered with him.
After losing the 35th America’s Cup, Larry decided not to challenge again. Instead, he founded and bankrolled the SailGP circuit, which consists of six nationalized teams racing identical 50-foot foiling catamarans that were converted from the America’s Cup 35 effort. The events are in Sydney; San Francisco; New York; Cowes, England and Marseille, France. Larry aims to make this sailing league similar to the Grand Prix circuit in motor car racing. We had a front row seat for the action!
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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.