I couldn't disagree more regarding this tired "retained interest" argument. Retained interest and Pfandbrief bond structures would not have prevented the current issues at all. Take a look at the retained interest model used in Auto ABS, or better, subprime Auto ABS - value interest near $0, pass costs onto other bond investors, make more risky loans. The current model where the special servicer buys the b-piece actually works much better - it mostly failed because they got competitive and started reselling the risk into CDOs (the market has effectively stopped that). Special servicer takes first loss risk, manages problem loan portfolio, receives fees for working out problem loans and from cash flow on bonds.
This guy is a really smart guy, and has more CMBS experience than just about every single other person in the market.
Penner experienced a meteoric rise of his own at Nomura Securities Co. in the mid-1990s before his sudden departure in 1998 amid a spreading Asian financial crisis.
... oh yeah, that Asian financial crisis. I don't know shit from shinola, but his departure may also have stemmed from the nine-figure loss he amassed in just six months at Nomura, and was followed just weeks after his resignation by a complete shuttering of the CMBS operation there. AND, followed for years by multiple violation of reps and warranties lawsuits that successfully put back multiple loans to Nomura that resulted in huge losses.
Doctor's Hospital by itself was a $50mm loss, on a senior mortgage that was something like $49mm - made on a hospital that had appraised in the single-digit millions just before the loan was made (just 18 months before his resignation)! This one loan took something like 10 years to play out, so the losses that could be tied back to actions that he oversaw, are actually substantially higher than what you read about.
I really don't have anything in the world against the guy, but if you're going to allow press releases that go out showing all the shiny stuff, flip flop on what you say year-to-year, and then not acknowledge the flip-flopping and prior errors that are fairly substantial and at least something an investor in one of CBRE's funds might want to hear both sides about... Well, someone is going to say something. And it might be me, and it might be anonymous. But, I'll make a deal - let me know if anything is wrong here, and I'll retract it and apologize about it. I'll even send a gift basket with shinola in it to any offended party.