Sentiment was a mix of guarded optimism with a small dose of caution at the January Commercial Real Estate Finance Conference (CREFC) held in Miami, Florida this year. At this 20th annual conference, just under 1,900 registered attendees examined real estate values. The consensus seems to be that there is little room for growth, but a meaningful correction does not appear imminent.
In terms of declining changing market share of CMBS, new issuance volume was down in 2018 compared with a year ago; the lack of loan originations from 2008 to 2010 is cited as a potential factor in that decline. CMBS lenders are also competing with private debt funds that may offer more competitive terms. Panelists commented that enhancing the servicer experience for borrowers may be a contributing factor to CMBS regaining its market share.
Investors remain concerned about the slipping credit quality of loans and the increasing presence of interest-only structures. Competition was a big word as several players remarked how many lenders are looking to put money to work right now in the face of slowing loan demand.