These questions were at the heart of TRIA, the federal backstop for terrorism insurance that at one time was very controversial. For the moment that particular issue is quiet – TRIA has been extended through 2014.
However, it is still in the back of rating agencies' minds, if a recent guidance by Fitch Ratings is any indication. The events of Christmas Day, meanwhile, are sure to push the issue to the forefront.
Earlier this month Fitch Ratings reminded the industry that while terrorism insurance and environmental due diligence have been dormant issues among rating agencies – primarily because the CMBS market has been dormant – it is still part of essential criteria when rating securities.
Now that a handful of TALF and non-TALF CMBS issuance are coming to market, building owners need to make sure they have the necessary policies in place, Managing Director Bob Vrchota tells GlobeSt.com.
"As the market evolves, all we want to do [with this guidance] is remind the market that we expect full coverage for terrorism – especially larger assets or buildings that are considered symbols of America," he says.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
