CMBS 4.0 project announced at CREFC Conference, which was surprisingly upbeat

I just returned from New York from the annual CREFC conference. Compared to the last gathering in January 2024 in Miami, the mood was generally glass-half-full.

Maybe everyone was in a good mood because the trade organization was celebrating 30 years, or because Trevor Noah did an amazing job talking about the power of diversity to a room full of bankers. But I think it had more to do with the CMBS new issuance market having its moment. With the banks and private lenders pulling back, the CMBS market has been filling the void and having a good year — especially traditional conduit.  So, with all the concern about SASB losses and obsolete office buildings, the traditional conduit market remains open.

The most interesting thing was a new project called CMBS 4.0. From what I understand, CMBS 4.0 is the trade group looking at how it works and committing to improving. CREFC pursuing change is a very positive development. I will get involved to see if there is any appetite to include rent roll disclosure and an updated data format for the IRP as part of the project. Maybe the risk in office loans is enough to motivate the change?

Jim Flaherty