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Hospitality Lawyer Insights from MTM: #10. When will CMBS come back?

21 May 2009

Hospitality Lawyer Insights from Meet the Money® 2009: The hospitality lawyers of JMBM’s Global Hospitality Group® have presented an annual hotel conference for 19 years. On May 5-7, 2009 in Los Angeles, California, nearly 400 industry leaders gathered at the Sheraton LAX for Meet the Money® 2009.

Presentations from Hotel Industry thought leaders by JMBM’s hospitality lawyers

The PowerPoint presentations from a number of industry leaders at Meet the Money® 2009 are listed with hyperlinks at JEWELS from Meet the Money® 2009 — the “best ever” hotel conference.

Commentary and observations from the hospitality lawyers of JMBM and other industry experts on some of the critical industry issues are available at Hospitality Lawyer Insights.

Here is the latest in the Hospitality Lawyer Insights series on some of the most critical issues of our day.

#10. When will CMBS come back?

Suzanne Mellen:


Suzanne R. Mellen CRE MAI
Managing Director
HVS International
(415) 268-0351

“We need liquidity to drive values. We need to replace the kind of capital provided by CMBS.”

Robert B. Stiles:


Robert B. Stiles
Executive Vice President & Principal
Cushman & Wakefield Sonnenblick Goldman
(415) 658-3601

“CMBS is about 25% of the $3.4 trillion in real estate debt, but the percentage was even higher in the last couple of years. The percentage of CMBS debt in the hospitality arena is even more disproportionate.”

Jonathan Roth:


Jonathan Roth
Canyon Capital Realty Advisors

“But CMBS doesn’t exist anymore. All the infrastructure that supported CMBS is gone. What will replace it?”
Barry Olson


Barry Olson
Managing Director
Archorn Group, LP

“We need to have some kind of securitization. The issue transcends CMBS — we have to addresses all asset-backed securitizations.”

Steve Van:


Steve Van
President and CEO
Prism Hotels & Resorts

“CMBS is a wonderful vehicle that will come back. It’s good for investors as it allows them not to pay taxes twice. One of the problems with it in its latest form is that it was not transparent enough. Transparency was good in 2000, so it is possible to achieve.”

Bruce G. Wiles:


Bruce G. Wiles
Managing Director & Principal
Thayer Lodging Group
(301) 581-5910

“Due to the sheer numbers involved, there will be a mortgage-backed securities replacement for CMBS. There has to be. There will be smaller loans, underwritten differently. There will be a deleveraging, and you will have to rework your capital stack. But it will come back in some form.”

Barry Olson

“I agree that CMBS will come back in some form. We will go back to “Lending 101″ including recourse, guarantees, and sounder underwriting.”

Patrick O’Neal


Patrick O’Neal
Vice President
Midland Loan Services, Inc.

“While there are many similarities to the last downturn, this one is different in many ways. CMBS is fairly new, so few borrowers understand how it works when there is a default in the CMBS context. The industry is getting a good education as to how CMBS works and where problems. Lie. Will these be fixed for whatever replaces CMBS?”
Jim Butler :


Jim Butler
Chairman, Global Hospitality Group
Jeffer Mangels Butler & Marmaro, LLP

For a discussion with the experts on working with CMBS special servicers on troubled hotel loans, see Hospitality Lawyer Insights from MTM: #5. Troubled hotel loans in CMBS – working with special servicers.

This is Jim Butler, author of and hotel lawyer, signing off. We’ve done more than $60 billion of hotel transactions and have developed innovative solutions to unlock value from troubled hotel transactions. Who’s your hotel lawyer?

Our Perspective. We represent hotel lenders, owners and investors. We have helped our clients find business and legal solutions for more than $60 billion of hotel transactions, involving more than 1,000 properties all over the world. For more information, please contact Jim Butler at or 310.201.3526.

Jim Butler is a founding partner of JMBM and Chairman of its Global Hospitality Group®. Jim is one of the top hospitality attorneys in the world. GOOGLE “hotel lawyer” and you will see why.

JMBM’s troubled asset team has handled more than 1,000 receiverships and many complex insolvency issues. But Jim and his team are more than “just” great hotel lawyers. They are also hospitality consultants and business advisors. For example, they have developed some unique proprietary approaches to unlock value in underwater hotels that can benefit lenders, borrowers and investors. (GOOGLE “JMBM SAVE program”.)