The timing is right, Bill Hughes, SVP and managing director of MMCC, tells GlobeSt.com. This time last year, lenders were sitting tight; not only were they not making loans, but they also had hunkered into a defensive stance over borrower defaults and modifications.

"One of big issues investors have had with lenders is their non-response," Hughes says. "We have had clients that haven't made a payment in six months and still have not heard from their lenders. So the borrower is just sitting in limbo not knowing what to do."

Much of lenders' response was due to the overwhelming nature of the crisis, he says. Now, lenders have sorted out their options--and are starting to address borrowers who have gone into, or about to go into, default.

GlobeSt.com: How do you see 2010 shaping up?

Hughes: Certainly as we start off 2010 we are in a better position than we were in 2009. The credit markets have become more liquid, relatively speaking. Think back to where we were in 2009. The equity markets have improved and the fear factor has dropped dramatically.

GlobeSt.com: Commercial real estate is still in the woods though.

Hughes: Yes of course, but there were other intangibles last year that made the environment so difficult for both borrowers and lenders. We had a brand new administration and didn't know how it would react to events. Also, lenders unfortunately read the same headlines as borrowers do and irrespective of the fact that they had money to lend the incredible uncertainty about the economy worked against deals--even if they were solid ones. Many times we would work through the loan process and by the end of the due diligence the credit officer would back off not because of the deal but because something new had happened to undermine confidence even more in the economy.

GlobeSt.com: I'd like to hear more about the capital moving into the market. What are some of the new sources, or re-emerged sources, that you think will be active this year?

Hughes: Life insurance allocations have improved--we don't have a quantitative number from them but it is clear that they have increased allocations for commercial real estate in 2010. Also we have seen a number of successful securitizations with TALF. And finally, a number of issuers are starting to use their balance sheets to accumulate debt in order to securitize it. Goldman Sachs, Deutsche Bank, JP Morgan Chase, they are all accumulating loans now that will ultimately be securitized.

GlobeSt.com: Do you think we will see CMBS reemerge this year?

Hughes: Yes. It'll be different, of course, than what we had in 2007, but it will be there.

GlobeSt.com: Meanwhile, though, the commercial real estate industry still has significant debt issues with loans coming due that were underwritten with far different standards than today, not to mention the underperformance of the asset that they are likely experiencing. That is where your new group comes in. How are you going to help those borrowers? What can you do for them that they can't do themselves?

Hughes: We look at their problems from the lenders' perspective and counsel them on the best way to negotiate a deal. We have developed plans with lenders to work through these debt issues before and we know what makes them feel secure and at what point they are ready to take the property back.

GlobeSt.com: I guess we will be seeing more of that--taking properties back--this year now that lenders have gotten their sea legs again?

Hughes: Oh yes. I guess that is the downside, if you could say that, about the stabilizing economy at least from the borrower's perspective. Lenders are getting ready to act again.