Properties Magazine April 2017 : Page 20

FINANCIAL STRATEGIES Smart use of fiscal planning & action Catch the Wave few months ago, we discussed, among other things, my fasci-nation with 1970s-era TV game shows. But these weren’t the only thing that caught the fancy of my youth; the police drama genre of that era was also a favorite. And at the top of my list was “Hawaii Five-0.” I was hooked from the beginning – literally. The show always started with a 15-to 20-second ominous teaser, such as someone found dead or being kidnapped, and then would immediately lead into the show’s opening title. Who can forget the image of that rolling pipeline ocean wave, accompanied by the introduction of the Ventures’ iconic theme song? Not me. A ALEC J. PACELLA The current state of the commer-cial mortgage-backed security (CMBS) industry is eerily similar to the show’s introduction – fast paced, filled with intrigue and mystery, all set against the image of a huge wave. But the circa-2017 real estate wave isn’t water, it’s CMBS loan maturities – an estimated $2.7 billion over the course of this year. CMBS loans are a unique animal. Not only are they pooled and securitized but there is no true underlying guaran-tor for the issuance in the event of a default. This month, we are going to talk about what exactly happens in the wake of one of these loans ending in a crash. In order to better understand what can happen at the end, we have to start at the beginning. As a part of the origi-nation process, there is a detailed and dense document known as a Pooling and Servicing Agreement (or PSA) that provides the rules of the road. It describes how the trust fund that constitutes the issuance is adminis-tered and serviced, how the payments are made, what the servicing duties include and how the distributions are made to the certificate or bond hold-INDUSTRIAL FOR SALE 104,753 SF Industrial/Manufacturing Facility 477 Lexington Avenue, Painesville, OH 44077 84,600 SF Industrial Facility 608 S. State St. (One High Tech Ave.) Painesville, OH 44077 x 30’ Ceiling Heights x Rail Siding x Storage Tanks x 5 Ton Crane x 5.9± Acres x 19 Drive-In Doors Real Estate Advisors Inc. Local Knowledge, Global Reach, Proven Results Economic Incentives Available Through City of Painesville & Lake County Port Authority 440-255-5552 20 8585 East Ave., Mentor, OH 44060 Properties | April 2017

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