GRAPEVINE, TX-In September 2009, the national economy was still floundering, with most loans, it seemed, headed toward special servicers or default. Meanwhile, banks and commercial real estate executives attempted to get their minds around concepts such as TARP, TALF and PPIP.

Not coincidentally, September 2009 was also when the first RealShare Distressed Assets took place in Dallas.  “Speakers Define Real Estate’s ‘New Normal’” GlobeSt.com reported of the event.  The new normal involved walking away from troubled assets, concerns about accurate value appraisals and fears that maturing loans would have zero financing options, meaning certain default. The RealShare Conference Series is produced by ALM's Real Estate Media Group, which also publishes Real Estate Forum and GlobeSt.com.

Three years later, on the eve of the 2011 RealShare Distressed Assets conference taking place Oct. 4-5 at the Gaylord Texan in Grapevine, TX, words such as “new normal” and TALF have been more or less scrapped from the commercial real estate lexicon.

John Salustri, ALM’s real estate group content director, will facilitate a talk with Federal Deposit Insurance Corp.’s assistant director structured sales Richard Salmon at this year’s event about how participants can take advantage of the FDIC's structured asset sales. Salustri acknowledges the distressed market is changing; certainly has changed from where it was three years ago. As such, this year’s RealShare will attack “the changing nature of the distress market from a variety of angles, from asset management and the lending environment to current opportunities,” he tells GlobeSt.com.

Salustri has a point when it comes to distressed assets and change. For one thing, the FDIC didn’t have much to do with structured sales three years ago. And clearly, this year’s event as different goals from, and will address different issues than, the 2009 event. But one thing that seems to remain the same as it did in 2009: Those CMBS loans.

Transwestern executive managing director Steve Pumper points out, as he did in 2009, that CMBS loan maturities need to be watched, and watched carefully. “There are still $170 billion to $180 billion in assets in the CMBS world in the form of special servicing,” comments Pumper, who is moderating the RealShare “Special Servicers Power Panel” this year.

Pumper moderated the special servicers panel during the inaugural RealShare Distressed Asset event as well as a similar panel in 2010, and points out now what he has during the past two years. Namely, as loans mature, obtaining new funding might be difficult because debt providers are becoming more and more cautious. As a result, “we could see an increased amount of assets going back to servicers during 2012 and 2013,” Pumper tells GlobeSt.com.  

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Though CMBS might seem to be a broken record, Pumper acknowledges changes within the distressed asset arena during the past three years. For one thing, he says, note sales are being considered, which wasn’t the case in 2008. For another, the industry is successfully using the auction platform to move assets – again, something that didn’t happen three years ago.  Recapitalization is also effective in certain situations.

Furthermore, the environment is different today than it was in 2009. The euro is wasn’t in crisis three years ago; nor were the economies of Greece, Spain, Italy and Ireland (at least, not on the surface). Furthermore, unemployment wasn’t anticipated to be a long-term problem.

Such challenges are reasons why this year’s RealShare Distressed Assets is geared toward providing important information about the best way to deal with anything foreclosed, in default, approaching maturity or anything else that in distress. Salustri says the idea behind this year’s RealShare is to provide a better understanding to participants about how to deal with a variety of opportunities that are available, as well as getting participants up-to-date on what, exactly, is going on out there.

Pumper, meanwhile, is hoping to shed a little light on how the special servicer role as evolved during the past three years.  The whole conference, in fact, will be packed with speakers and sessions that will provide food for thought on the distressed market. It’s important it should be this way, as “we’ll be dealing with all of this for at least the next three years, in varying degrees,” Pumper says.

Meaning it will be interesting to see what the 6th annual RealShare Distressed Assets, to take place in 2015, will yield.

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