A webinar roundtable on the capital and liquidity challenges facing REITs and large commercial real estate companies and the impact on the sector and lenders

Recorded March 3, 2009.

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With debt financing unavailable or unaffordable, deleveraging is working its way through the REIT sector and commercial real estate at large. Significant challenges face REITs with respect to funding needs in the next several years, with many facing capital and liquidity challenges that have them scrambling in the short term to shore up their balance sheets.

To shed light on this situation and its affect on the outlook for REIT performance, SNL Financial brought together leading industry experts for a critical discussion of the credit markets and sources of liquidity for REITs and large commercial real estate companies.

Topics Included:

The Sector at Large

• -	REIT stock performance LTM, valuation metrics and NAV, etc.
  -	The relationship between debt levels and trading multiples
  -	With all the disruption, what are the opportunities in this market? What companies are likely to emerge stronger?
  -	How can management, investors, advisors and others best position themselves to prosper through this cycle?

The Credit Market

• -	What is the state of the credit market for REITs and large commercial real estate companies? What do spreads look like? How have REIT bonds performed?
  -	What do leverage ratios look like? Which companies have the highest debt load and most acute liquidity needs?
  -	Credit ratings? Upgrades/downgrades?
  -	What property types have been most affected?

The Investment Banking Perspective

• -	State of debt offerings for REITS?
  -	What public sources of debt financing are available?
  -	What are the alternative sources of capital?
  -	What will it take for the CMBS market to return?
  -	How are debt covenants changing with the credit crunch?
  -	How else are REITs managing capital, e.g., asset dispositions, stock as dividend, dividend cuts, etc.?
  -	How much autonomy do special servicers have with regards to loan modifications in the face of increasing defaults?

The Corporate Banking Perspective

• -	What are the general bank lending trends and terms?
  -	What are lenders looking for right now? Are new covenants/restrictions arising?
  -	Who are the active lenders?
  -	What are the LTV ratios for the CRE market?
  -	What is the total LOC for REITs and CRE companies right now? Draw downs?

The U.S. Government's Role in Recovery

• -	What legislative and regulatory efforts are being supported by the different industry groups?
  -	How are the stabilization and stimulus plan initiatives including TALF and other legislative measures likely to impact the funding options?

Panelists

Clifton E. (Chip) Rogers, Senior Vice President, The Real Estate Roundtable

Clifton E. (Chip) Rodgers, Jr. has been at the center of every major piece of financial services legislation and regulatory action for over a decade, successfully representing real estate’s stake in the national policy arena on financial services issues.

In addition to his work in federal government relations on national policy matters pertaining to credit, capital market and risk management issues, Mr. Rodgers has 15 years of experience in capital market, real estate investment banking, work-outs and debt restructuring activities at Mellon Bank, Fannie Mae, The First Boston Corporation, Phillips Realty Capital, a Goldman, Sachs & Co venture with the J.E. Robert Companies (now known as the Archon Group), and Legg Mason.

He is currently focused on the credit crisis and on implementing national policy measures to restore liquidity, mitigate market tension and safeguard systemic stability.

Rex E. Rudy, Managing Director, Head of Real Estate Corporate Banking, Wachovia Bank Corp.

Rex Rudy is a Managing Director and Group Head of the Real Estate Corporate Banking Group where he is responsible for originating, structuring and monitoring the Bank’s credit exposure to large real estate entities including REITs, REOCs and Opportunity Funds.

Mr. Rudy's numerous transactions include secured, unsecured, high grade, leveraged and bridge financings. In addition to balance sheet transactions, Mr. Rudy is responsible for the coordination/origination of other debt products from the firms’ platform including public debt, loans originated for securitization and mortgage placement opportunities with this client set. 

Mark Streeter, Managing Director, Senior Credit Analyst, JPMorgan Securities

As senior analyst in North American Credit Research at JPMorgan Securities, Mark is responsible for high grade, high yield and Chapter 11 coverage of the real estate and transportation industries. Mark is a 16-time member of the Institutional Investor "All-America Fixed Income Research Team", most recently in 2008 for High Yield Transportation (#1 ranked) and High Grade REITs (#2).

Prior to joining heritage JPMorgan in January 1999, Mark held various positions in the fixed income businesses of heritage JPMorgan Securities and Morgan Guaranty Trust. Mark is a member of The Fixed Income Analyst Society and formerly co-chaired FIASI’s Program Committee. Mark served on FIASI's Board for two years as well. Mark is a member of NAREIT, the Urban Land Institute, the International Council of Shopping Centers, The Wings Club, and the International Society of Transport Aircraft Trading.

Mark is a regular instructor on REIT credit at SNL’s REIT School and has served as a program coordinator for the National Association of Real Estate Investment Trusts (NAREIT) Institutional Investor Forum in New York

James M. Taylor, Managing Director , Eastdil Secured

James Taylor joined Eastdil Secured’s investment banking team as a result of Wells Fargo’s acquisition of Wachovia Securities in Dec 2008.  Mr. Taylor originally joined Wachovia’s Real Estate Corporate Finance Group in 1998 and was promoted to Head of Real Estate Investment Banking at Wachovia in 2007.  Over the years, Mr. Taylor has completed public debt and equity offerings, M&A transactions, asset and portfolio sales, private equity placements, mortgage financings and bank loans for numerous real estate clients.

Prior to joining Wachovia, Mr. Taylor practiced corporate and securities law with Hunton & Williams, where he represented both issuers and underwriters in public and private equity offerings, debt offerings and M&A transactions, with a focus on equity REITs. Previously, Mr. Taylor worked as a senior accountant for PricewaterhouseCoopers in Washington, D.C.

Keven Lindemann (moderator), Director of Real Estate, SNL Financial

Prior to joining SNL Financial in 2001, Keven was Director of Business Analysis for the online real estate brokerage, Homebytes. From 1998 to 2000, he worked for BB&T Capital Markets as vice president and senior real estate analyst in the Equity Research Group. From 1995 to 1998, he worked for the Trammell Crow Company. Keven is a graduate of the University of Virginia (1991) and holds both an MBA and an MS in Real Estate and Construction Management from the University of Denver (1995, 1996). He is Series 7 and Series 63 registered and holds the Chartered Financial Analyst designation.

CFA Institute

1.5 Hours of Professional Development Credit

SNL Center for Financial Education is registered with CFA Institute as an Approved Provider of professional development programs. This program is eligible for 1.5 CE credit hours as granted by CFA Institute.

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