Industry Mood Better as CMSA Confab Nears

As the Commercial Mortgage Securities Association prepares to gather for its 11th annual January conference, the atmosphere is decidedly more upbeat than a year ago.

A slightly improving economy and the recent re-emergence of securitization after a 17-month absence are supplying signs of hope for an industry battered by the financial collapse. While the sector still faces a long road back to anything approaching the go-go days of 2005-2007, real estate finance specialists traveling to Washington for the event have some reason for optimism - especially compared to last January, when the market was in a death spiral.

"I'm going down to see what the mood is," said one commercial MBS trader. "I assume it's going to be positive."

The association expects attendance to stabilize, following a big nosedive last year. Some 425 people have signed up so far for the gathering on Jan. 19-20 at the JW Marriott Hotel, slightly ahead of last year's pace. The group thinks the customary surge of last-minute registrants will push attendance past 750. That would be above last year's 706 total, but still well below the record 1,403 tally in January 2008, as the CMBS market was derailing.

This time, the conference has some major changes, most notably the venue. For years, the event was held in the swanky South Beach section of Miami Beach. The relocation to Washington reflects the sensitivity of government-rescued lenders these days to the perception of junkets. It's also a bow to the reality that Washington is now the center of the universe for commercial real estate finance, given the plethora of regulatory, legislative and accounting reforms on the table.

The association has also acted to cut the cost of the trip for a suddenly expense-conscious industry. In addition to moving the event closer to New York, where many members are based, the group shortened it to two days from three and lowered the registration fees dramatically for non-members. That latter step is also aimed at furthering the association's new strategy of attracting members beyond its traditional CMBS focus.

While acknowledging "we still have a bumpy road ahead," association president Patrick Sargent said that the industry's mood is clearly more upbeat, with the pricing of three CMBS transactions in the past few weeks providing an important psychological lift.

Sargent, a partner at law firm Andrews Kurth, said the burst of activity is encouraging industry professionals to compare notes on other deals in the works. Finance specialists are also eager to gauge how long it will take conduit lenders to become more active, because the resurgence of multi-borrower deals is crucial to the market's full recovery, Sargent added. He also cited a need for market players to meet in order to get a handle on the degree to which a consensus is emerging on the valuation of distressed CMBS, commercial mortgages and properties. "We still have a value question that is not completely answered," he said. "People will want to talk about that."

Meanwhile, the agenda reflects the association's expanded scope. The gathering is no longer being billed as an "investor conference," and buysiders will likely represent a smaller share of the participants going forward. Some 281 buysiders showed up last January, representing 40% of the attendees.

The first day will be dedicated to forums for newly targeted groups - portfolio lenders, mortgage buyers, servicers and multi-family shops that sell loans to Fannie Mae and Freddie Mac.

"The forums give [attendees] an opportunity to have a mini-conference within a conference, focusing on their issues," said Lisa Pendergast, head of CMBS strategy at Jefferies & Co., who will take over as CMSA president in June.

The early-bird registration rate is $1,095 for employees of CMSA member companies, up $100 from last January, and $1,395 for non-members, down $300. After Dec. 22, the fee rises to $1,295 for members (same as last January) and $1,595 for non-members (down $600). Registrations at the door are $1,395 for members (down $200) and $1,695 for non-members (down $1,000).

Unemployed conference-goers can get in for $547.50, or half the lowest member rate. But only two people have signed up for that discount so far, so the number of "unaffiliated" attendees will probably be far lower than the 20 who signed up last January. CMSA officials see that as a sign the market is returning to health.

The conference is one of the association's two big annual events. The other is its June convention in New York.

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