CleanTo2ndLien @CleanTo2ndLien Twitter profile

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CleanTo2ndLien

9 months

After reviewing $15b+ of CRE opportunities per year since 2020 (NPLs and originations), I've decided to start sharing insights and deals (redacted) as we head into the long awaited recession. Welcome aboard. #CRE #RealEstate #capitalmarkets

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Banks. Reserves. "No Issues". A thread 🧵to better explain what I see from my side as a note buyer chasing bank loans. #CRE #RealEstate #Lending

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CleanTo2ndLien

@CleanTo2ndLien

3 months

Had coffee yesterday with the CEO of a large multifamily owner / operator + 3rd party manager. He mentioned they can barely keep up with the inbounds from debt funds and banks looking for operational solutions / exits. He specifically harped on Texas and mentioned that a

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Summary If I didn't make it clear above, I do not think banks have adequate reserves for the real underlying issues. I'm also not saying banks should mark to market their books. We are in a not-so-funny downward spiral where there is a mountain of performing to sub performing

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CleanTo2ndLien

@CleanTo2ndLien

14 days

A colleague in the industry shared a CRE CLO market report with me last week. There was a chart in there that really stuck out to me. I trimmed down several columns so it could easily fit here. This is sorted by highest balance and in billions. Short 🧵: Data Sauce: Barclays

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Office/retail asset in NYC just traded. 2015: Acquired for 89mm, loan 59mm 2024: Sold for 26mm For the finger counters out there (me): - 29% of last purchase price - 44% of loan amount Saw this one in many iterations the last few years.

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Headed to Miami tomorrow for IMN Distressed Debt Conference. Oddly, one of my favorite things about these conferences… I get to walk straight up to people that don’t take my calls 😂 (the Clean special). Talk about addresses on their book, or market in general all while

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Let's elaborate on something I said yesterday, a 🧵: What's becoming more clear is not having to sell (debt funds) vs can't sell (banks). But who lends to the debt funds 😎? #CRE #RealEstate #Lending

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CleanTo2ndLien

@CleanTo2ndLien

5 months

So they want to sell a loan, now what? Banks will send us a loan they want to sell. We'll value the property and factor in what we can pay for the loan based on several items: default rate, foreclosure time, $$$ to stabilize the property, time to stabilize the property, earn

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Notes from the shadows 👻 Just finished up lunch with an executive of a large NYC based owner/operator - very nice guy, super sharp. Office commentary: He was telling stories he heard of banks/debt funds restructuring loans and subordinating pieces of their positions to

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Some good calls/meetings booked after this one. The most unique and personally a first - a Bank Examiner A regulator reached out to me to discuss the post and gave permission to share these takeaways, which (un)surprisingly is inline w/ the issues presented in the quoted

CleanTo2ndLien

@CleanTo2ndLien

5 months

Banks. Reserves. "No Issues". A thread 🧵to better explain what I see from my side as a note buyer chasing bank loans. #CRE #RealEstate #Lending

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CleanTo2ndLien

@CleanTo2ndLien

5 months

What happens now? Banks have been taking things quarter by quarter because it's really the only thing they can do. In my opinion there will be more shock as time goes because what will appear as "sudden increase in loss reserves" really should be no surprise. But until then,

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CleanTo2ndLien

@CleanTo2ndLien

7 months

This is not meant to be a doom post. But odd activity on the note sale side of things. Received another 75mm+ in NPLs today. That’s now 175mm in last two days. The principals of our firm also got a call yesterday/today on more deals. 4 years in and this has never happened.

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CleanTo2ndLien

@CleanTo2ndLien

2 months

I watched this video a few times. I've previously said that I think one of the surprises will be warehouse line / repo facilities to non-bank lenders. These facilities do not count towards a bank's CRE exposure. A few weeks ago I spoke w/ one of the top 5 banks, they mentioned

Andrew Sinclair, CFA

@CT_Osprey

2 months

He said it out loud.... Fed's Kashkari Warns of Big Losses From Commercial Real Estate

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CleanTo2ndLien

@CleanTo2ndLien

8 months

Here is a live NYC rent stab situation that just hit my inbox. A New York sponsor bought a 55 unit deal in 2016 for 45mm. The bank provided a 27mm loan, which currently has a 24mm balance. Flash forward to today, the sponsor is buying the debt back for 13mm. That is 54% of par.

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Even before the statement was issued above, it was always much of the same - 'no issues." I remember a lunch I had a couple of years ago w/ a NYC based workout guy ("WOG"). Just as we sit, the conversation starts - WOG: Clean, you seem like a really nice guy and I don't want

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CleanTo2ndLien

@CleanTo2ndLien

1 month

Caught up with a developer I’ve known for several years. His team has built 25k+ units. Has around 2,500 units in various stages right now: permitting, mid construction, lease up. According to him: - His 2021-early 2022 starts will likely breakeven at best. - dealing

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Just less than a year ago, the FDIC released updated guidance to their 2009 statement on handling commercial real estate loan workouts. Basically allowing banks to reasonably work with borrowers for yes, you guessed it, loan accommodations/modifications. Pretty interesting to

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CleanTo2ndLien

@CleanTo2ndLien

24 days

𝘔𝘶𝘭𝘵𝘪𝘧𝘢𝘮𝘪𝘭𝘺 𝘊𝘙𝘌 𝘊𝘓𝘖 𝘱𝘳𝘰𝘫𝘦𝘤𝘵. The goal is to find what I would define as transactable deals for my own hunt (not 1970s 🐕💩, greater sunbelt geo, <100% LTV) Thread below is based on watchlisted deals in June-July 2024. (Source: @cred_iq )

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CleanTo2ndLien

@CleanTo2ndLien

6 months

From what I've seen in CLO world, once properties even show <30 days delinquent, the real number is likely higher and situation much worse than what's reported. cc: @cred_iq

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CleanTo2ndLien

@CleanTo2ndLien

7 months

This is good. Just got off with my workout contact at a bank w/ 15b+ book. They claim ZERO problems. I push back. How can you really have no problems? Didn't get a clear answer. Then I started talking about CREFC and how no one really talked about problems. He goes to me.

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Bank Examiner Conversation: Part III Thread time 🧵 As things are heating up w/ banks, Mr. Examiner and I have been chatting every weekend. This conversation touches on: - real time market feedback and psychology - how things have evolved since last year - addresses #ReTwit

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CleanTo2ndLien

@CleanTo2ndLien

5 months

So what was the point of that story? And how does this have anything to do w/ reserves? As I've said countless times in posts and replies, loans have been modified to perform, even though there are serious underlying issues. But banks are following the rules... you might say!

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CleanTo2ndLien

@CleanTo2ndLien

2 months

Spoke w/ a multifamily group in Texas yesterday. The owner recently let the entire team go. Portfolio is decent quality, not the old vintage 🐕💩. I know they have some upcoming maturities, zero shot they can get cash neutral solution. Not easy out there...

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CleanTo2ndLien

@CleanTo2ndLien

3 months

Great 🧵 here, I imagine most of ReTwit has already read this. Some thoughts from my seat: 1. the resilience of these CLO deals has been surprising. I haven’t seen true forced selling. Which is somewhat surprising as “equity value” of the originator’s position is basically

m. stanfield

@mu2myoc

3 months

Is the world ending? No, at least it seems unlikely. For a variety of reasons, this isn’t 2008 all over again. - CLOs are different than CDOs and the resulting alignment of interests is a powerful mitigant. - CLOs, unlike CDOs, are backed by the senior loan. Of course, you

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CleanTo2ndLien

@CleanTo2ndLien

13 days

Had an intro call this week with one of the top 10 CLO Managers in this list (not Arbor). Despite their data looking pretty clean, they mentioned there will be a lot deals coming to a fork in the road in the next 6 months. I keep saying this over and over, but the delinquency,

CleanTo2ndLien

@CleanTo2ndLien

14 days

A colleague in the industry shared a CRE CLO market report with me last week. There was a chart in there that really stuck out to me. I trimmed down several columns so it could easily fit here. This is sorted by highest balance and in billions. Short 🧵: Data Sauce: Barclays

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CleanTo2ndLien

@CleanTo2ndLien

7 months

New Year’s dinner in gramercy tonight. Me: babe, see this building, they’re converting to condos, almost 3,000/SF debt ask! No chance that get’s done. Me: oh and see down the street there?! Definitely going non-performing. Been tracking that one for 3 years. Wife: nice

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CleanTo2ndLien

@CleanTo2ndLien

26 days

Hudson River 4th (Been over a decade since the last Hudson River July 4th fireworks)

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Pretty wild week. Monday - 10 readycap CLO’s transferred to special servicing - got asked to finance NYC office building at 25% to original par. (Couldn’t hit pricing) Tuesday - Bank volatility Wednesday - A bank I speak to saying they need to trim 20% of their CRE

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CleanTo2ndLien

@CleanTo2ndLien

7 months

Friendly reminder of what discounts mean to levered lenders. At origination: Debt fund loan to sponsor: $100 Warehouse/repo advance to debt fund: $70 Debt fund equity in deal: $30 Loan sale: 90% of par = 33% loss of equity to debt fund 70% of par = 100% loss of equity to debt

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Bank workout guy (“WOG”) quote of the day: “These are good loans, they're performing. The LTV is just high, and the debt yield is low." Clean:

CleanTo2ndLien

@CleanTo2ndLien

8 months

Bank workout guy quote of the day: "We've got some turds floating to the top" Translation: Year end note sales.

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Costar: We have the largest research team in commercial real estate, we assemble accurate data using our powerful tech. We track over 7 million properties and over 8 million commercial tenants. also Costar: So you want to switch users on your account? We don't have the ability

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CleanTo2ndLien

@CleanTo2ndLien

29 days

I've been living in CLO land the past few weeks. As of last week there have been 1,000+ properties added to watch lists since April 1 2024. It's very difficult to understand what is truly going on. This creates opportunity, but also painstakingly slow. I speak with lenders, I

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CleanTo2ndLien

@CleanTo2ndLien

6 months

This is for the NYC folks. I attend a standing monthly lender lunch (organized by a guy at a bank). It is specifically lenders and a few operators show up. It is very casual - at a BBQ restaurant. Hands down the best networking in the city IMO. Guards are down, people chat

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CleanTo2ndLien

@CleanTo2ndLien

2 months

Had lunch w/ @acquisizioni today. Discussed some NJ land with him in the past, we wanted to meet in person. He comes in and sits down. I immediately realize I know this guy. We had mutual friends in high school and we hung out several times almost 20 years ago. Even more

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Had a call this morning with a top 10 bank regarding where they are pricing warehouse lines / repo facilities today. Again, these are facilities that lenders (private lenders, debt funds, REITs, etc) "Debt Funds" use as their underlying leverage when making new bridge loan

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Some of the sub-performing / non-performing loans coming in the last couple days have been pretty wild. Legit exactly the situations Mr. Examiner mentioned he will be scrutinizing. 3-5 occurances of the following per deal: modifications, extensions, defaults (and re-perform)

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Conversation I had this week that has only occurred 2x in the last 4 years. Bank: "We think we would like to be 1st mover on note sales, not playing catch up when everyone else starts selling." Very smart, too much money chasing NPLs. What's that supply/demand thing again?

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CleanTo2ndLien

@CleanTo2ndLien

3 months

Weekly Pipeline Update Summary Loan origination side of things still brutally slow. The only multifamily deals brokers are hounding me on are effectively 100% LTV and "SOFR 500 range will play". Both debt and investment sale brokers starting to discuss the need for "creative"

CleanTo2ndLien

@CleanTo2ndLien

3 months

Weekly Pipeline Update - Stay Thirsty My Friends Summary Interesting week, caught up w/ several multifamily brokers in Dallas, Houston, and Phoenix. - Dallas seemed like the most positive sentiment. - Houston was tough, my highly valued investment sales contact mentioned that

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Lost a couple of multi deals recently to.... bank financing. Non stabilized deals in lease up or have vacant units that need renovation. Just when i thought we were the last dollar guys. 😉 Same dollars, 400bps better pricing.

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CleanTo2ndLien

@CleanTo2ndLien

3 months

I'm tracking a CLO deal right now that has the trifecta for something to shake loose. 1. CLO loan maturing this summer. Will not qualify for extension, have already spoken to the lender. (Found lead on @cred_iq distress alerts). 2. Property currently listed for sale with one

CRED iQ

@cred_iq

3 months

We sub-divided the CRE CLO from two perspectives: 1) Loans that have been added to the servicer watchlist. 2) The triggers that caused the watchlist designation. CRED iQ’s latest loan-level analysis as of April 30, 2024 indicated that 38.6% of CRE CLO loans are currently on the

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Every few months I get a bridge request where the broker starts with… The borrower has some “legal issues”. I smile and ask, “are we talking state or federal?” There’s usually a long pause because there is a little factor where I don’t think they realized who they just got

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CleanTo2ndLien

@CleanTo2ndLien

7 months

About 2 years ago we had our junior analyst walk soho and write down addresses to vacant retail. I’m thinking about doing the circuit myself this week. Why do this? - no tenant = no cash flow - look up the debt. Call the lender (Yes I still need to get my father in law his

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CleanTo2ndLien

@CleanTo2ndLien

7 months

A ticking 💣 in NYC is condo inventory loans. I don't think this has been discussed enough w/ all the #ReTwit doom talk. What are condo inventory loans? A developer gets a construction loan to build a condo building w/ approved condo plan etc. Each unit can be individually

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CleanTo2ndLien

@CleanTo2ndLien

1 month

Wrapping up a friend’s birthday dinner. Had to snap a pic of a NPL I’ve worked on 3x. And of course as an origination 2x.

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CleanTo2ndLien

@CleanTo2ndLien

8 months

met with mid sized bank for drinks 20-30b loan book. 3-4b office exposure. 1b absolute toast. According to them that means they need to raise 900mm reserves. Where does that come from? Bank specialists feel free to opine. In addition they need to raise against

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Liquidity... Been tracking a NYC deal since September 2023. Multi over retail. Borrower (backed by pension fund) paid the loan balance down down by 50%. They're now into the deal for over 100mm. We thought value was 60mm.

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Can I get a real lesson on: 1. How CRE CLO’s and their underlying collateral are serviced? 2. who does the reporting that is released to the public? 3. Why the CLO originators claim 1 and 2 are wrong? Please don’t point me to some 400 page offering doc. Talk to me like the

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CleanTo2ndLien

@CleanTo2ndLien

2 months

I see some FDIC talk on #ReTwit . Interesting to see items @hitsamty and I covered earlier this year playing out in real time. Snippet from FDIC post on May 29, 2024: "The number of banks on the Problem Bank List, those with a CAMELS composite rating of “4” or “5,” increased

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CleanTo2ndLien

@CleanTo2ndLien

3 months

Been working on a bank relationship for (checks notes)… years. Finally received some opportunities after specifically pointing out deals from their filings (thanks X/Twitter). One of the deals is severely impaired. I know it, they know it too. Alas, no discount allowed…

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Summary - Banks are stuck in a very tough spot and I've worked with several note sale brokers that say: "the banks can't take the losses because they don't have the reserves to really move loans" - Debt Funds just aren't feeling the pressure (at least publicly) from Banks.

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CleanTo2ndLien

@CleanTo2ndLien

7 months

Here’s a good one. Got a call today for 25mm bridge request on multi in Houston. Loan maturing in February. Called my trusted investment sales contact. “Stay away from this one, tough area, pretty sure the club house was burned down by a Molotov cocktail, not kidding”

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Ready Cap coming in hot today w/ CLO transfers to special servicing. 10 deals totaling ~100mm in UPB Seems the bulk of these is to one borrower in the Midwest. Source: @cred_iq (Daily Distress Alerts) #CRE #RealEstate #Lending

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Both my parents have separately reached out to me today about "bits corn" and "ethos". Spidey senses starting to spike. When they start talking "dog" coin, you can really push out your rate cut estimates, maybe start thinking rate hike. Now back to typing up this NPL LOI...

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CleanTo2ndLien

@CleanTo2ndLien

9 months

I've personally worked on refi requests for Arbor bridge deals, and can confirm there are plenty at 100%+ LTV in today's environment. @viceroyresearch Have you done same analysis on MF1?

Viceroy

@viceroyresearch

9 months

Viceroy have pulled data of every single loan in Arbor’s CLOs. It's bad. We believe Arbor's residual equity in the CLOs, valued at around $1.4b, are worth nothing. These loans are not eligible for refinancing without uncommercial equity injections by investors. $ABR 9/

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CleanTo2ndLien

@CleanTo2ndLien

7 months

Anyone have $5b+ they want to put out? Let me cook. (This seems to be the impossible capital to find. It blends core ish payoff returns with special sits plays) Returns: - 8-10% IRR on payoff - 13-17% IRR on foreclosure. Asset Class: - Newly built Multifamily / BTR

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CleanTo2ndLien

@CleanTo2ndLien

5 months

This morning I gave 1 hour internal presentation on bank data, exposures, etc. The focus was multifamily and relevant metrics within the institutions. All public and private FDIC banks. Not sure how to describe the sentiment... Foaming at the mouth? (also had my new Jordan 3

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CleanTo2ndLien

@CleanTo2ndLien

7 months

Looks like a CLO originator is enforcing a default on failure to buy a rate cap (which was then followed by a payment default). This is the first I've seen of a lender enforcing a default related to rate cap expiration. 100mm+ loan in the Northeast. Not Arbor, so everyone can

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Language change I’ve noticed over and over with banks. “We can’t take less than 90% of par” Key word - CAN’T - meaning they don’t have the reserves / ability to take the loss. So how do we get to a point where the banks CAN take the losses? Ok you might say put more towards

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CleanTo2ndLien

@CleanTo2ndLien

2 months

Weekly Pipeline Update Summary I mentioned a few days ago that it feels like there is finally some momentum in the CRE note sale world. TBD if that plays out, but seeing borrower capitulation and lender fatigue increasing. The note sale brokers consistently mention how much

CleanTo2ndLien

@CleanTo2ndLien

2 months

Weekly Pipeline Update Summary Several note acquisition opportunities trickled in last week. Mix of debt fund, LifeCo, and bank loans. - Waiting on a few direct quarter-end bank opportunities to come in, hopefully will have more detail on them by next Sunday. - Two large

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Overview - IMN Distressed Debt Conference Bank Sentiment - Still not much to sell "yet" - Regulators and exams mentioned. This is not new for me, but hits different in person. - i discussed the "performing loan" issue with banks, they understood, but no solution yet... - the

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Hearing whispers of multiple debt fund type lenders pulling back on new originations. I’ve seen this before, but will it last to create enough friction… tbd.

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CleanTo2ndLien

@CleanTo2ndLien

5 months

I’ll never forget emailing with FRB a few days before they went under. No loans to sell. Everything was fine. Caught this pic on my way to lunch just now. Ah the memories.

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CleanTo2ndLien

@CleanTo2ndLien

12 days

$ABR related commentary from Barclays regarding DOJ probe. Barclays: "From an operations perspective, we do not think the investigation in and of itself constitutes an event of default under the indenture for the CRE CLO deals outstanding, which could lead to an acceleration

CleanTo2ndLien

@CleanTo2ndLien

14 days

A colleague in the industry shared a CRE CLO market report with me last week. There was a chart in there that really stuck out to me. I trimmed down several columns so it could easily fit here. This is sorted by highest balance and in billions. Short 🧵: Data Sauce: Barclays

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Busy week so far. Had calls w/ some regional-ish banks. And for the first time in a long time they have openly said they need to trim CRE loan exposure. What that will look like from asset class / discount perspective, tbd. But a step in the right direction. I retract my

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CleanTo2ndLien

@CleanTo2ndLien

6 months

First time getting got in person. Was just at drinks with a bank - genuine good person. Sparing all the details, one of my tweets came up with his colleagues and he mentioned it. I froze. Banker: “judging by your reaction… Are you… Clean?” Me: “I am Clean” Both: 😂😂😂

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CleanTo2ndLien

@CleanTo2ndLien

6 months

I’ll gladly eat my words here, but we are still a little early regarding market clearing note sales. Could these securitized loan foreclosures potentially force bank’s hands? Maybe, definitely doesn’t help their book. However, It’s on the regulators to really stick it to

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Community Q's for Mr. Examiner - Focus on owner occupied home loan fraud? Not really covered by this group - when will more pressure come on banks regarding floating rate loan exposure? 1.20-1.25 DSCR is obviously generally the baseline, so with floating rate loan exposure this

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CleanTo2ndLien

@CleanTo2ndLien

7 months

Boarding flight, bumped into lender I know. Lender: we are going to have some NPLs for you Me: yah I've heard that before 😏 Lender: well this time for real Me: you just showed me a 3 debt yield deal you want par on. Lender: well that one is in an evergreen vehicle… we

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CleanTo2ndLien

@CleanTo2ndLien

7 months

-2024 and beyond- I started this account to give insights on a unique side of the industry - real estate note acquisitions and large bridge loan opportunities. Here are my open book go forward plans: 1. Continue to share pipeline, opportunity sets, bids, etc 2. Help others.

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Practicing for a follow up call to a bank tomorrow. Hey John, this is Clean. I’m an active note buyer, not one of those bottom feeder kind of note buyers, you know, one of those “got anything to sell, we like discounts” kind of guys. I’m more of a talk with my internet

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CleanTo2ndLien

@CleanTo2ndLien

4 months

I've mentioned that multifamily loan originations are extremely competitive right now. In theory, I'm the high leverage guy pushing last dollar proceeds, and our pricing reflects that. But competitors are constantly at or above proceeds and 50-100bps cheaper. 🧵

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Busiest I've felt in a while. Still can't tell if anything immediate term is actionable. Somewhat random deal flow (geographically). An overlooked topic by me (with all the focus on debt funds) is banks also have multifamily floaters with expiring rate caps. If borrowers don't

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CleanTo2ndLien

@CleanTo2ndLien

2 months

Weekly Pipeline Update Summary Several note acquisition opportunities trickled in last week. Mix of debt fund, LifeCo, and bank loans. - Waiting on a few direct quarter-end bank opportunities to come in, hopefully will have more detail on them by next Sunday. - Two large

CleanTo2ndLien

@CleanTo2ndLien

3 months

Weekly Pipeline Update Summary Loan origination side of things still brutally slow. The only multifamily deals brokers are hounding me on are effectively 100% LTV and "SOFR 500 range will play". Both debt and investment sale brokers starting to discuss the need for "creative"

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Upstate weekend to visit family and friends. Wife headed to Pilates shortly… Which means Clean will have solo breakfast with computer out, reviewing the week and digging into leads. Last 2 weeks characterized by over $1b in deal flow of which zero will be on the pipeline

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Had lunch with a partner at a debt fund type lender today, they do $1-2b per year. It was our first time meeting in person, we only spoke once before. We sit down, he looks at me and goes, "wait, how do we know each other and how did you find me?" Clean's favorite inception

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CleanTo2ndLien

@CleanTo2ndLien

2 months

Pure deal flow has consistently been 300-500mm per week the last month or so. Most of those opportunities I did not add to the weekly pipeline as they had no chance for pricing and/or LTV reasons (both loan orig and note acq) There seems to be a recent change in sentiment, 🧵:

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21

CleanTo2ndLien

@CleanTo2ndLien

6 months

Continued the Soho circuit yesterday with someone I met on the platform. Got coffee, talked life, and cruised up a few blocks. Did some quick math on existing debt vs what we thought spaces would lease for. In short maturing loans in Soho are in trouble, but as with

CleanTo2ndLien

@CleanTo2ndLien

7 months

As promised, I spent about an hour walking the Soho circuit for vacant retail. Started at Lafayette and worked my way west. Covered Lafayette --> Crosby --> Broadway. Found 15 vacant retail spaces. Next step, look up lenders... #CRE #RealEstate #Lending

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14

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19

CleanTo2ndLien

@CleanTo2ndLien

6 months

Now comes interest rate hikes, and at this point, I have seen legitimately billions and billions of what i would consider very troubled loans. But I keep hearing "we have no problems". It's simple. The loans have been papered to be performing. - if the regulators are not

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20

CleanTo2ndLien

@CleanTo2ndLien

5 months

Is this… mid 30s? Stretching before I know I’ll be driving for a few hours?! Off to NJ this AM.

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CleanTo2ndLien

@CleanTo2ndLien

6 months

How I imagine I sound and look like talking about debt - so that’s just a 100 billion right there on new construction multi - doesn’t include the billions and billions of CLO originations - just imagine all the office exposure outside of this BUT THERE ARE NO PROBLEMS!!!!

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20

CleanTo2ndLien

@CleanTo2ndLien

6 months

Love the smell of distress on a Monday. A call just came in on NYC office. We bid the debt at roughly 40% of par a while back. Turns out someone is buying it in that range, we were just asked for financing which would amount to low 20's (%) of original par.

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CleanTo2ndLien

@CleanTo2ndLien

8 months

Starting to think more about opportunity sets for the next 12 months. Will continue to shape this. 1. Providing leverage to other debt funds that need to move NPLs off their warehouse lines. I think there will be large opportunities here. Spoke with NPL brokers who are

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20

CleanTo2ndLien

@CleanTo2ndLien

3 months

Weekly Pipeline Update - Stay Thirsty My Friends Summary Interesting week, caught up w/ several multifamily brokers in Dallas, Houston, and Phoenix. - Dallas seemed like the most positive sentiment. - Houston was tough, my highly valued investment sales contact mentioned that

CleanTo2ndLien

@CleanTo2ndLien

3 months

Weekly Pipeline Update Summary I skipped Sunday pipeline email last week, frankly, there weren't many updates and wanted to spend the afternoon w/ my wife. Back to work... there have been discussions internally, and we'll be focusing in on a few states. I'm currently working on

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CleanTo2ndLien

@CleanTo2ndLien

4 months

We've made the most offers on note acquisitions last 90 days as we have the last 12-18 months. "Hit the bid" on a few. Getting lenders to move forward... that's another story. Q1 acqs becoming end of Q2 acqs.

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19

CleanTo2ndLien

@CleanTo2ndLien

3 months

Here's a first for me. NPL came in this week. NYC. No default rate, no equity pledge, with a rate ceiling sprinkled on top :)

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20

CleanTo2ndLien

@CleanTo2ndLien

7 months

Weekly Pipeline Update Went through and cleaned house on a lot of deals. If only I got paid for D3 @D deals... To all the doomers on the timeline today... lender gave extension on the KC deal, another lender not concerned about sub 4 debt yield, another one sitting on an

CleanTo2ndLien

@CleanTo2ndLien

7 months

Weekly Pipeline Update Sending today as I'm flying down to Miami tomorrow morning for CREFC. Pipeline sits at 22 deals totaling 813mm. Several deals I'm monitoring in the background. Note Acqs - 9 deals totaling 293mm. Of the 9, 8 are through direct relationships Loan

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Cracks are Showing Mr. Examiner had an internal meeting last week: - the "paper data" doesn't look bad (which we all know), but starting to notices banks doing things back in spring 2023 that was giving 08-09 vibes. - the bank responses about modifications continue to be

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CleanTo2ndLien

@CleanTo2ndLien

6 months

Cred IQ with the Happy Friday email showing 1,400+ loans added to watch lists 😂 Lots of conduit and small balance - probably not a fit, but wild. cc: @cred_iq

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19

CleanTo2ndLien

@CleanTo2ndLien

8 months

Three lenders w/ 250mm+ exposure each to a few syndicators. Putting this here now so we can all track how this evolves over the next 3-6 months. Lender 1: apparently entertaining some offers on the loans, maybe slight discount, 90-95% Lender 2: doesn't want to sell, if they

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Are we back to 2021? Just with less transactions? Hear me out. Multifamily originations are going off at head scratching proceeds/pricing (relative to where rates are today). Had another one yesterday. I simply adjusted expenses, said where I would be. Broker: Ah, it’s all

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Bank Examiner Conversation: Part 4 As noted in today's piece w/ @hitsamty , I spoke w/ Mr. Examiner again last weekend. I was eager to get back on the phone given almost every bank i speak to now mentions "the regulators are here." #ReTwit Community Q&A later in the 🧵 #CRE

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CleanTo2ndLien

@CleanTo2ndLien

8 months

I am seeing debt funds essentially hand out extensions to existing borrowers. At little cost or sometimes free. We that afraid of our warehouse lines?

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CleanTo2ndLien

@CleanTo2ndLien

4 months

GM #ReTwit Three separate instances in the last 2 weeks where individual borrowers have come up with 7 figures to buy more to time with their lender. I know this because you guessed it, we were trying to buy the loans... 😑

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16

CleanTo2ndLien

@CleanTo2ndLien

24 days

@cred_iq 𝗦𝘂𝗺𝗺𝗮𝗿𝘆 I like to be targeted. You only have so much time during the week and the research can take hours as the work is pretty manual. Remember, the result of all this work could be ZERO (no one selling or price doesn't work.) If it is a zero, KEEP FOLLOWING UP!

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CleanTo2ndLien

@CleanTo2ndLien

7 months

Live update from CREFC. All the lenders have money. Take your discounts elsewhere.

CleanTo2ndLien

@CleanTo2ndLien

7 months

Friendly reminder of what discounts mean to levered lenders. At origination: Debt fund loan to sponsor: $100 Warehouse/repo advance to debt fund: $70 Debt fund equity in deal: $30 Loan sale: 90% of par = 33% loss of equity to debt fund 70% of par = 100% loss of equity to debt

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Absolute beast of a mom getting off the subway this morning. Pushing stroller with child in it, gets to the stairs, I offer to help… She declines and straight picks up, double stepping up the stairs. Parting of the sea with people going down the stairs. I was impressed. Now

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CleanTo2ndLien

@CleanTo2ndLien

5 months

Bank Examiner Convo: Part 2 Couldn’t help myself and scheduled another call with the bank examiner to discuss the infamous wall of maturities, how it’ll be handled, and what it means for banks. Leaned on @hitsamty to help put it together. Will likely do another thread over

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CleanTo2ndLien

@CleanTo2ndLien

5 months

You don't call them, they call you. This was one of the cooler conversations I've had in my career. To speak w/ someone that feels truly in the shadows and a mystery to a lot of the market... At the same time, it felt like an epiphany moment. Why? A few reasons: 1. They

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CleanTo2ndLien

@CleanTo2ndLien

4 months

Weekly Pipeline Update Summary I was quiet on #ReTwit this week, was working through deals. This week was low volume on the bank front, likely will stay that way for the next few weeks - no more quarter end rush. Some debt fund multifamily deals came through, but not adding

CleanTo2ndLien

@CleanTo2ndLien

5 months

Weekly Pipeline Update Summary Cleaning house, got word some notes will be taken to market, no sense in clogging the pipeline. The large origination on pause as well. It was recommended to me by a fellow #ReTwit colleague to mark the new additions to D3 @D Deals to make it

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