#MBACREF23: Matt Rocco Outlines CMF Priorities, Opportunities
(MBA Chairman Matt Rocco keynotes CREF23 in San Diego on Monday. Photo credit: Ashley Marshall.)
SAN DIEGO—When the Chairman of the Mortgage Bankers Association is from the commercial/multifamily sector, as Matt Rocco is this year, it makes the MBA CREF Convention & Expo a little more dynamic.
“Like many of you I’ve been coming to CREF for years. And it is my honor to be here serving as you chairman,” Rocco, President of Colliers Mortgage, Charlotte, N.C., said here Monday during the Opening General Session. “Working in this industry has been the biggest joy of my professional life. And now serving you, in this capacity, is the greatest privilege I’ve ever had.”
Rocco said his highest priority as MBA Chairman is to listen. “I want to hear about the challenges you face,” he said. “And I want to know the opportunities you see. We’re living through; unprecedented, dynamic, challenging, uncertain times – you pick the word or phrase that best describes your business. But what we know is that the old way of doing things just doesn’t work anymore. The pandemic changed the rules of the game. And now the rules are changing again. We must know what’s happening so we can stay ahead, and that starts by understanding the facts on the ground.”
Rocco said his focus as Chairman centers on three main issues:
—Multifamily Affordability. “[This]is a huge issue that has been getting worse by the day. A growing number of people are struggling to afford mortgages and rent, particularly near urban and job centers,” Rocco said. “It’s not just a multifamily problem. It’s a commercial problem, too. Companies need workers who live close to their jobs. As a society, we can’t keep making people spend more and more on rent, nor can we afford to push people further and further away from work – Our focus needs to be on industry positive and progressive ways to enhance delivery of affordable units for our most vulnerable communities.”
Rocco encouraged MBA commercial/multifamily member to sign the MBA Home for All Pledge. “A core pillar of the pledge is to promote and support public policies and industry practices that advance affordable rental housing,” he said. “Another pillar is to actively champion diversity, equity, and inclusion in our workplaces and our industry.”
—Asset Value Recalibration. “Markets are struggling to determine the true value of properties, resulting in a stand-off between buyers and sellers,” Rocco said. “Asset value recalibration is hard for the debt and equity but may look like blue sky for new investors and we will all watch this play out over the next 24 months.”
—Interest Rate Volatility. “I don’t need to tell you what rates have done over the last 12 months and what sort of payment shock many borrowers face as their loans mature,” Rocco said. “MBA is focused on what is happing now and expected to happen as a result of these changes – De-Fi Refinancings, What CECL means for banks and our CRE market, equity recaps, just to name a few.”
Rocco also said commercial real estate also presents three key opportunities:
—Favored Asset Class. “CRE assets and investments are a diversifier for asset managers looking to invest money in higher-yielding bond-like equivalents,” Rocco said. “From institutional investors to family offices, including regional and local investors, folks want exposure to CRE assets and mortgage investments. In fact, today’s price recalibration, caused in part by last year’s rapid rise in interest rates, has created intense interest and opportunity for investors. “
—Stable Property Performance. “[It’s] still stable or even strong for multifamily, industrial, special purpose; data centers, cold storage, MOBs and select retail centers, Rocco said. “I have said for years that the office sector isn’t overbuilt, but under-destroyed. Office assets need to re-price or be repurposed, and those needed value adjustments create pain for some but opportunity for others in this room and in our industry.”
—Capital Availability. “[We’re] returning to where a more balanced market should be,” Rocco said. “Freddie Mac, Fannie Mae, Insurance Cos., Pension Funds, Private Equity Groups, banks, capital markets investors, and others are looking for exposure to CRE mortgages and assets. It is also true that some investors enticed by exceedingly low-interest rates will rotate out of CRE assets, and that creates an opportunity for new CRE investors to enter the market at today’s valuation.”
“We are all competitive and everyone keeps score,” Rocco added. “And I’m not saying it’s going to be easy, but I believe we are going to persevere through these uncertain times, and the MBA will help you along the way.”
