Banks are starting to hire again as they return to structuring CMBS, a sign that the financial markets are gradually returning to normal. “I see lots of friends who used to be employed, and weren’t for a while, and are now being rehired by institutions,” said Jonathan Strain, debt capital markets director at JPMorgan Chase’s CMBS division.
This industry-wide hiring is evidence of the banking sector’s effort to recover from the depths of the Great Recession and rebuild the capability of providing liquidity to refinance commercial real estate owners who need to recapitalize their portfolios. Industry leaders believe that CMBS may never recover to its 2007 origination peak of $237 billion. So far this year, CMBS originations total just over $1 billion. According to one banker, the CMBS market may eke out $10 billion in 2010; that could ultimately grow to a total of $100 billion annually several years down the road.
According to Lisa Pendergast, managing director with Jeffries Group, Inc., “Supply will be far less than what we were accustomed to.” Pendergast also is president of the CRE Finance Council, the industry’s leading trade group.