I had four days at the Tribeca Grand this week, and it has felt a little bit like September 11, 2001. Except this time the crisis is in the economy.
The TV set (at least mine) has been glued to CNN and WSJ Online to see the latest on the bailout. The UN is in town, and the police presence is huge with boats, helicopters and sirens blaring. That certainly contributes to the “siege” or “crisis” atmosphere.
President Bush gave the Nation a definition of mortgaged backed securities. In primetime. Wow.
But when I ventured out to spend time with my clients, there did not seem to be a sense of panic. While all lenders are sitting on the fence right now, the core teams to run the infrastructure are generally in place, albeit “Right Sized.” Good real estate people can make money in all markets, and I see firms keeping long term commitments to the space.
But make no mistake, lenders that survive need either Asset Management/Servicing revenue or a big balance sheet. The markets are broken and need fixing. If the US finance system breaks and we have a George Bailey run on the banks, this business plan might suffer the same fate as the original September 11 LoopLender fiasco (See The history of Backshop and CMBS.com).
So, I had a “recovery” day where I spent the afternoon at the 10th Street Baths (1st Avenue and 10th Street), a functional place to cure whatever ails you. As long as you are OK with 120 degree saunas, 50 degree cold plunges, and getting beaten with oak branches. Try it next time you’re in New York. www.russianturkishbaths.com
Speaking of George Bailey, here’s a timely scene from “It’s a Wonderful Life”
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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.