In May at the MBA tech conference in Chicago, I laid out the CMBS.com master plan to Mike Lipson of Capmark, a major master servicer and traditional mortgage broker. I have known Mike since GMAC bought Hanford/Healy in 1996 (where I worked before founding GateCapital) but he had not heard of the CMBS.com name (we have been known simply as Backshop).
Lipson said I should change the name of the company because CMBS has such a bad connotation.
He went on to predict that CMBS would never return as a dominant financing source, and the old days of private transactions and non-public data was the way of the future.
I countered that the borrowers already made the reporting trade when they took out the CMBS loan and signed their conduit loan documents which required reporting on rent rolls and operating statements to a master servicer for dissemination to investors. Plus, Google and CoStar already make that information public anyway. He was not convinced, and we agreed to disagree.
He makes a good point, though, as real estate has traditionally been very private. If we “fix” the CMBS industry by providing transparency but, in doing that, we kill the industry because borrowers do not like the product anymore, we did not accomplish the goal.
While we can address some of these concerns through technology (aggregating rent roll data, dropping tenant names, password protection), the fact remains that if the whole industry is more open and transparent, it is more open and transparent.
Will borrowers be willing to take CMBS loans in the new world of CMBS 2.0? Stay tuned. …