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CREFC Countdown: Five Biggest Takeaways From the New York Conference

• Dechert LLP • Episode 24

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Has a “bullishly measured” commercial real estate outlook for 2025 become “cautiously fatigued”? Dechert 4 Real’s Matt Armstrong, Jon Gaynor, Stewart McQueen and Kate Mylod rank the 5 biggest takeaways from this year’s CREFC Annual Conference in New York, ranging from the vibe shift since January’s conference in Miami, the uncertainty the CRE market is currently processing, repo trends, GSEs using AI to root out mortgage fraud and more. 

Show Notes 

CREFC 2025 Annual Conference - Full Agenda 

Jon Gaynor:

Hello, and welcome back to the Dechert 4 Real podcast, where we discuss current issues and trends in commercial real estate finance. We aim to bring market commentary about developments, updates you can use, and maybe a little bit of banter along the way. I'm Jon Gaynor, a partner based in Dechert's Philadelphia office.

Matt Armstrong:

I'm Matt Armstrong, a partner based in Dechert's New York office.

Stewart McQueen:

I'm Stewart McQueen, a partner located in Dechert's Charlotte office.

Kate Mylod:

and I'm Kate Mylod, a partner in Dechert's New York office.

Jon Gaynor:

in this special episode, our podcast team will be discussing our top five takeaways from the CREFC Annual Conference held in New York at the Times Square Marriott. But first, let's get 4 Real with the hosts to break the ice. Now, we talked about this in January, but we all established these vision boards, and I thought that it would be fun to follow up to see how everybody is doing on theirs. I'll start. My goal was to channel Aristotelian virtue. And like all good goals, it wasn't SMART in that it wasn't Specific, Measurable, Achievable, Relevant, or Time gated and I feel like I am trying to live by, you know, Aristotelian virtue. Do the right thing for the right reason, which is, you know, have good habits, all that stuff, and I'm doing my best. What about you, Kate? I think you had to read 36 books and be nicer to

Kate Mylod:

I think that's right. And I think I rejected your husband. the vision board concept because I said I'm too old to really know what that means. So as I'm listening to your Aristotelian virtues, and I'm thinking of,"OK, I'm glad I picked something very concrete and tangible." So I did start off the year very well with my adventurous book reading, but I have fallen behind, which is derivative of our degree of busyness. So, I am 10 books in. So, it's not outside the realm of possibility. I am going into summertime beach reading, so we'll see if I can make some progress to catch up a little bit. And the, you know, be nicer to my husband. I mean, for the record, audience, I'm always nice to my husband, but I have been a little bit nicer to him, and he's been really nice to me.

Jon Gaynor:

All right. There you go. You get what you give. I like, you know, you'll make it up on the second half.

Matt Armstrong:

Yeah. And work does slow down in the summertime when all the bankers go out to the Hamptons. So, you got a chance.

Kate Mylod:

I do have a chance. And I need to pick, maybe, some lighter books to read than some of the ones that I read. So.

Matt Armstrong:

Well, you're a third of the way there. So.

Kate Mylod:

I am.

Jon Gaynor:

All right, what about you, Matt? I think you had sporting with your family and maybe getting to your beach house.

Matt Armstrong:

Well, I definitely am off to a good start this year in meeting these goals. So, not so much going to the beach house specifically, but I went on a surf trip to Costa Rica with my oldest son, Jack, he's 12 years old now, and some of our cousins, and it was a great time down there. We had four days at the beach in Costa Rica surfing, and it was just amazing. So, you know, I didn't get to do surfing down at my beach house, but I think Costa Rica, I'll take that as a substitute. Elsewise, throughout the year, you know, my son is now involved in swimming. So he's on a swim team, so almost every weekend we're going to swim meets or traveling for something. So last year our events were golf and flag football, and this year it's been a lot of swimming, riding bikes on the weekends, and the surf trip to Costa Rica, which was amazing.

Jon Gaynor:

Travel. Well, all of that sounds great, and travel sports with kids are rough. My five year old is doing soccer and, like, getting to the game in the one spot every weekend was like, really rough. Now, Stewart, you like me, had a completely nebulous series of visions on your board. I think you had some Michael Scott quotes, some Dwight quotes, and ultimately, I think was it your grandfather or your dad, who's saying, like, don't be complacent. How are you doing on

Stewart McQueen:

To clarify, Michael Scott and Dwight Schrute that? are both characters from the TV show "The Office." And you know, as I watched that show over the years, certain quotes stand out that I try to live by, and I do. I still live by those quotes. Interesting enough, my wife and my daughters, my teenage daughters, are actually re-binge watching "The Office." So occasionally I sit in on a couple of those episodes. And there are a couple of new quotes that I like that Michael Scott has thrown out that I'll share with this team. The first one being, "The only time I set the bar low is for limbo. Always keep the bar raised no matter what." And the other one is,"Would I rather be feared or loved? Easy? Both. I want people to be afraid of how much they love me." But in all seriousness, the quote, you know about complacency I got from my grandfather, and you know, it's still something that resonates very well with me, and it's even true in today's environment, given the uncertainty and, like, in the markets and things we're all dealing with daily, is that, you know, you always have to be on your toes and you always have to be forward looking and willing to grow and grow with the market.

Jon Gaynor:

All right, well, that was wide ranging. Stewart, and I like how you're trying to jump right into the substance, so I guess that counts as us getting ... you're gonna ...

Kate Mylod:

I am gonna jump in, though, before we wrap up our getting 4 Real with the hosts, are we gonna revisit this in

Jon Gaynor:

For January? Maybe when we, like, set our new December to further test how we're all doing on this goals, I guess we're gonna have to. Is this our new tradition? How are we doing on improving ourselves as people? Or reading books or being nicer to our husbands.

Stewart McQueen:

I don't have enough Michael Scott quotes that I can actually quote that are appropriate for a podcast.

Jon Gaynor:

I'm wondering if we can just, you know, for strictly podcast reasons, petition for an"Office" reboot so we can get some more. OK, that has to count as getting 4 Real with the hosts. OK, so, let's dive in. The format for this is that we will be going through our top five major takeaways from the CREFC New York Conference, and I think that we start with vibe and that that is you, Kate.

Kate Mylod:

That's right. So, the vibe at the June 2025 CREFC conference in New York was markedly different than the vibe of the January 2025 CREFC in Miami, and think it was both literally and figuratively different, right? Let's think back to January. Sunshine, warm weather, Miami. Everybody's feeling good after a really strong year across the industry for 2024 and then we kind of launched 2025 with a kickstart bang. Here we are, six months later, our world has changed a lot in the last three to four months. We show up in New York, it's rainy and drizzly most of the time. We're inside. We're at Times Square, right? And what we're talking about is different than what we were talking about in January. Januarythere was a lot of forward-looking, optimistic thinking. We knew who the president was going to be, but the administration had not yet, you know, installed itself. Now we've had, you know, three to four months of this new administration, we've seen how the market has started to react to it. And as opposed to looking outward, I felt that at this conference, it was a lot of taking stock of where we are and assessing and trading notes and reacting and, you know, neither positive nor negative, but just a much different tone than what we experienced in January. What did you guys pick up on?

Matt Armstrong:

Yeah, I kind of picked up on the same thing. The market seems like it's not where people expected it to be, but it's not in a bad place, either. So, you know, in that way, the market's showing its resilience, that even when unusual things are thrown at it, for instance, the tariffs that were thrown out pn Liberation Day as, I think, what they were calling it. The market dropped a whole bunch, and then it's come all the way back, almost back to the all-time highs, at least on the stock market. Spreads blew out in the debt markets, and now they've come back. So, we're not anywhere where we thought we would be from the beginning of the year, but we're in a good spot.

Stewart McQueen:

Yeah, I don't disagree with either one of you. I picked up on the same things. One other thing I kind of picked up on, given all the things we've been dealing with this year, is fatigue. A little bit of fatigue. Just people worn out from things that are happening, and always having to be on your toes. It's be always, you know, receptive to the information we're getting, be prepared to pivot and move in different directions quickly. And that's, that's kind of the market we're in right now, where we're reacting to certain things real time and having to change course or come back and do different things. To me, it's fun, you know, coming to work every day and dealing with the uncertainty.

Jon Gaynor:

We were experimenting before recording, like, what a tagline would be. And I think we're at, like, fatiguedly optimistic or something like that?

Kate Mylod:

That's right, we were.

Matt Armstrong:

I think it was cautiously fatigued.

Jon Gaynor:

I'm incautiously fatigued right now with everything that's going on, so I'm happy to, like, bridge the gap there. You know, each of you were kind of touching on the kind of next thing that we were going to talk about. And I think, Matt, do you want to go more into number four on our list, the uncertainty that the market is processing?

Matt Armstrong:

Yeah, sure. So obviously, a lot of the uncertainty that we're dealing with now is just a result of the tariffs that you know, I guess they were put on initially, and then they were taken off and backed off. And so it leaves us in a spot where, at least for loan origination, it was different. Difficult to originate loans for, let's call it a one month period or so. And we're kind of starting to see a lag in the securitization space now, where we had a really healthy pipeline going into the beginning of this year, and then the pipeline backed off for about a one to two month period, but now it's coming back again, and so we have a new, healthy pipeline moving forward. There are some deals, you know, that were going to be done, but then, you know, maybe were hit pause, and we're expecting to see some of those deals come back and get worked through. Hopefully, you know, the second half of the year can end up being as busy as the first half of the year was, with this little pause in the middle of the year. You know, there's some other things that are causing uncertainty as well, not just the tariffs. You know, you have interest rates rising higher with the thought that maybe the tariffs, I guess, could cause inflation, and then if they cause inflation, then interest rates would go up. And so we're in this situation where, kind of like last year, the five-year fixed rate loans are very popular. Last year we saw the development of the five-year fixed rate conduit. You know, the question was always, "Is that something that's just temporary, a sign of the times, or is that something that's going to be permanent?" And at least, you know, in this higher interest rate environment that we've been seeing now, it seems like it's permanent. You know, the people at CREFC on the panel seem to say it would be permanent, that we'd kind of see a 1/3 five-year fixed rate conduit, 1/3 10-year conduit, and then 1/3 floating rate loans that would go into CRE CLOs. So, but we'll see, you know, we'll see what happens if interest rates ever were to go back down, if all of these borrowers that are looking for five-year fixed rate loans switch back and go to 10-year loans, and we just are back with 10-year conduit and five-year floating rate CRE CLOs.

Jon Gaynor:

Well, onone of the panels, somebody said, all of the borrowers are rates traders, and I think that once a 10-year pencils out as like a reasonable amount of risk, we're gonna see more interest in that again. But for the time being, the five-yearis way more appealing if you expect rates to eventually go down, right?

Kate Mylod:

You know, chiming in on the uncertainty, because this very well could be our number one, you know, just to maybe give away the ending, although we do have a different number one. But while uncertainty percolated through the discussions in the panels, as well as the discussions during the networking sessions and the off-site and on-site, you know, private meetings, it wasn't uncertainty that gave rise to paralysis, right? Which we have seen in the past. It's uncertainty that's affecting, I think, every sector of the industry in a similar way, and what that's causing is for those different sectors within themselves and also across sectors to put their heads together and figure out "All right, well, we're still going to transact, we're still going to get stuff done." And more than once, people made some parallels to what it was like during COVID. And it seems kind of weird, right? Because we've got, you know, all of these changes that are brought on by what's going on geopolitically and with our new administration, and what's going on in our economic markets to then, you know, draw this parallel to an epidemic that kind of stopped the world cold, but people still continued to figure out how to transact and came up with creative ideas, and they were collaborative, and they were trading notes, and everybody wanted to get back to that place where we were back in business again. Here, I don't think, you know, Matt's right, there was that blip, you know, I say a blip, it was a little bit more than a blip in April, when when people were reassessing how to move forward. But that's, I mean, it's almost like uncertainty tainted with optimism that was coming out of the conference.

Jon Gaynor:

You know, it's not just the tariffs that are driving the uncertainty. It's not the change management with the Department of Government Efficiency and the cuts going on there. It's not kind of like any political or civil unrest or any of that, too, like from a baseline level, like, we're not sure how institutions are going to function. Matt, I think you had some good views on, like, one of the panels on GSEs. What were you hearing?

Matt Armstrong:

Yeah, so I think a lot of people wanted to see, you know, if there would be any information about the GSE potential release from conservatorship. You know, we've been hearing about that. That's been kind of a theme of Trump's presidency so far that that's one of the things he wants to accomplish. We've heard about it in a couple of tweets from Trump and from Pulte, and I guess there wasn't really any new information that we found out about here, about that on the panels. But just to realize that, you know, this is something that's coming up. It's likely to happen. It's probably not a 2025 issue, but it's a 2026 issue. And, you know, we'll have to just find out more about it as the administration puts out its plan. It hasn't put out a plan yet. It's put out tweets or, I guess they're posts on X nowadays, right? They're not tweets anymore.

Jon Gaynor:

He doesn't even go on X. They're Truths.

Matt Armstrong:

Oh, Truth Socials, that's right, that we then see put up on X. But we'll have to see where this goes and how that ends up affecting things. You know, just on the GSE panel, the GSEs are performing pretty well this year. Each of them thinks that they will reach their cap of $73 billion. So they're out there. They're buying up loans, they're securitizing the loans, and, you know, they're trying to run their businesses as efficiently as possible.

Kate Mylod:

You know, Matt, just to there actually was, like a nomenclature change related to that, that I remember from the panel where they said, "We don't look at this as a cap, we look at it as a target. This is what we want to hit, right? And I think that's an interesting shift in the way to think about it.

Matt Armstrong:

Yeah, I think in the past few years they haven't made it to the cap or target, but I think this year, it sounds like their goals are to make it there. So it's likely we'll see more agency CMBS through the end of the year.

Kate Mylod:

Did I get that backwards, or did they talk about it as a kind of a target?

Matt Armstrong:

It is a cap, but now you could see them looking at it as a target, right? Because they want to make themselves relevant

Jon Gaynor:

It's also a little bit of a business mindset change too, I kind of like. It's a subtle, it's a subtle thing.

Kate Mylod:

That's what I was trying to get at with my point. Just make sure I do to make sure I didn't flip it around the wrong way.

Jon Gaynor:

You got it. You got it right. So, we go from uncertainty to maybe a segment where we're seeing people start to deploy more creativity to solve problems. Stewart, do you want to tell us a little bit about what was said about repo?

Stewart McQueen:

Yeah, there are a couple of things I took away from the repo discussion. One is, from a provider perspective, there seems to be a lot more competition to finance assets that a lot of people want to get financed on these lines. So, you're seeing a lot more people bidding to finance positions. So there's, I guess, a lot more money or capital out there to finance a fixed number of assets that are financeable on these lines. And then two seem to be more appetite for providers to deal with scratch and dent-type assets on their lines, you know, whereas in the past, it used to be there was a zero tolerance to hold a defaulted or credit risk asset on a repo line. Now, there seem to be creative structures out there to allow for certain periods of time to keep the assets financed while the lender tries to figure out ways to resolve the assets.

Jon Gaynor:

Yeah, and it's such a good development. It gives a lot more space for people to figure out what's going on and exercise a plan without losing their leverage. Most banks at this point will have some tolerance for some bucket of defaulted assets. Some providers of repo capital will let you have completely scratch and dent lines on relatively reasonable terms, where you might have a lower advance rate or a higher pricing rate, but you're still keeping leverage on the asset while you work things out, or even after you've foreclosed, and using these so called intercompany loans to finance the post-REO asset while you own it, and while you're trying to get it in a position to ultimately sell or get other permanent financing, which it's awesome to see, and a lot of positive movement there. You were touching on something that I think also maybe, Kate, you're in a good position to comment on, like multiple repo banks are bidding on every loan that the repo sellers are putting together.

Kate Mylod:

Well, that's right. And the repo sellers feel like, okay, well, you get to walk a little bit in my shoes, because I'm fighting against every other lender provider out there myself trying to figure out how to put my money to work for me. You've got the insurance companies and the, you know, traditional lenders and the new alternative lenders, everybody is trying to put their capital into the same limited number of deals where you've got good sponsors and good assets. So good deals to be had from that. So, yes, I think it's a it's a derivative function of what we're seeing for the direct loans on the assets themselves, the asset being the commercial real estate, and then that translating to that level behind, the structured finance level, behind of the repo lenders looking to put their money to work for them against good loans.

Jon Gaynor:

Now, another area that repo is kind of impinging upon a little bit, and I think this leads into our next item that you're handling for us. Matt, is CRE CLO repo right now is really being competitive with CRE CLO pricing.

Kate Mylod:

So for our audience, I just want to jump in. We are segwaying from item number three, which was repo into now

item number two:

CRE CLOs.

Matt Armstrong:

OK, all right. So CRE CLOs, there was a whole panel on CRE CLOs this year, which was interesting. And at that panel, they mentioned that, you know, the 2022 vintage of CRE CLOs is basically the worst-performing vintage that's out there. But what they're seeing now is stress, but not distress. And the reason why that 2022 vintage is not performing well is because all of those loans were originated at a time when SOFR was very, very low. I mean, maybe, like,.5% right? So, and now we're in a world where SOFR is in the 4s, and so to refinance all of the loans out of these deals is very difficult, right? So the numbers on these deals, they don't pencil at these new higher SOFR levels. So, they're working through these loans in these certain deals, and we'll see where that goes. But that's the 2022 vintage. We're now in 2025, so a lot of those reinvestment periods in those deals will have ended. Some of those deals are being called. We've seen optional redemptions of those deals, and other ones we're seeing loans being bought out as credit risk or defaulted assets. And so, what people are expecting is that any losses that are going to be incurred in these deals will be for the sponsors and not for the investors. So, the big difference between CRE CLOs and conduit CMBS is that the sponsors in these deals are retaining because these deals are done generally as a qualified REIT subsidiary, and in order to do a deal that way, the sponsor has to retain everything that's below investment grade. So the sponsors are retaining 12-15% of these deals. So, it's highly unlikely that any of these deals will have losses that will reach any of the offered notes, and so the sponsors, because of the other provisions that are in these CRE CLOs, which I'm talking about the note protection tests, your typical par value test and your interest coverage test, in order to make sure that those tests aren't violated, and the cash flows on the subordinate notes aren't redirected to pay down and turbo the offer notes. In order to avoid that, you know, the sponsors are incentivized to buy out any defaulted or credit risk loan out of these deals, and they've been doing that, and you know what they do once they buy that out of the deal, sometimes they'll just buy them out, and then the principal pays down the offer notes. Or sometimes they'll exchange in a new performing asset for one of these defaulted or credit risk loans, and then they'll work that loan out on their balance sheet, either on their balance sheet, or, as we were just discussing, now there are scratch and dent repos available so they can get some repo financing while they work that loan out. And then they have more freedom to work that loan out when it's on their balance sheet. They can basically make any change they want to it there at all, whereas when it's in the CRE CLO, you know, they're subject to the servicing standard.

Kate Mylod:

So, this is really interesting to me, right? And this came up in a number of sessions, but Matt, I'm really intrigued with how you put all of that together, because isn't this how the CRE CLO structure is supposed to work?

Matt Armstrong:

It is. So what we're seeing is, once again, we're in a stressed environment, and here the stress is caused just by at the time these loans were originated, interest rates were in a different place than they are now. And the structures are performing very, very well, even better than, you know, your typical conduit CMBS or SASB CMBS structures.

Kate Mylod:

And you know, Matt, you're, you're reminding me of something else that was a thematic, you know, interlace through this, which is, people, if I heard it once, I heard it three times, it's stop saying extend and pretend. You know, and that goes back to exactly what you just explained with, yeah, the 2022 vintage was not awesome for CRE CLOs because of where SOFR was. And we have all of these borrowers who are struggling to refinance at today's current rates, extend and pretend. I think that that really is like a vestige coming out of COVID, right? Just to help us bridge the gap of how to figure out the new normal there.

Jon Gaynor:

I think it happened in 2008 too in a certain sense.

Kate Mylod:

Sure, sure. Right. But here, I think what I heard, and this came up in, you know, from the servicers forum to the session that Matt was just describing, you know, to the high-yield investors forum is lenders are going to extend for good sponsors who put some money into the asset, right? But just kicking the can down the road is not what people want to be doing right now.

Jon Gaynor:

CRE CLOs still have room to grow, and there's still things that the product line and that sponsors can do to improve reception among investors, right Stewart?

Stewart McQueen:

That's correct, we as an industry have made some headway into some of the issues that have been raised by investors, particularly around transparency and reporting. Last year CREFC, along with Dechert and other industry participants, came together and standardized Annex A in addition to creating structure, I don't think it's unique to CRE CLOs that there is similar reporting templates for reinvestment assets and making sure that certain data providers could get access to this information, which has all been helpful to the industry and investors. But you know, there are other initiatives by CREFC underway. For instance, the collateral manager reporting, quarterly reporting, is under a standardization process right now to help improve the transparency for investors and to attract more investors to the industry. And that's, you know, one of the key initiatives of CREF and a lot of the sponsors out there is to how do we bring more investors into this product? Because it's, you know, as Matt and Kate have indicated, it's a great product. It's holding up well. It's performing well, and it's important to our industry. this desire for greater transparency, you know? And it kind of goes back to my complacency point, right? I mean

Kate Mylod:

Oooo! Look at him working in his vision board.

Stewart McQueen:

you can't just rest and assume that I've arrived and the product is great. You have to constantly innovate and think of ways to improve.

Jon Gaynor:

Not to talk my book, but what has been happening a lot is that the CRE CLOs get refinanced out with kind of repo-style or hybrid private CLO-style financing with the banks or with other kind of repo providers. And one point on one of the panels was, you know, the bank gets all the transparency they want, because they can call you and talk to you and demand whatever information is needed. And so, it gives them a slightly more comfortable position on a relative basis. So for CRE CLO to have a resurgence in the middle of this kind of distressed environment, investor reporting, standardization and communication, I think will really help. Now, I think we're on to our number one takeaway, and Kate, it's with you.

Kate Mylod:

Yeah, so I'd say the number one topic, although there's lots of great competitors for this slot, as we've just been discussing, but it's artificial intelligence. And even from the opening remarks to Ian Bremmer's session on geopolitics to the last session on hotel and office, at this morning sessions, AI percolated every single conversation in some way, shape or form. And there's a few elements to that. One is, well, we know it's here, right? And one of the things that really stuck with me, which actually came out of Ian Bremmer's discussion, was that, you know, geez, you know, 18-24, months, we had no idea what the world was going to look like with a device like or whatever you want to call what ChatGPT is and all the various competitors to ChatGPT, whatever we think is going to happen with AI in the future is going to happen so much faster than we can even realize. You know, if what we think where we'll be in 10 years, it's probably where we're going to be in two, where we think we're going to be in two years, it's probably where we're going to be at six months. So I did hear a lot of people talking about how they are working AI into their daily lives, professionally. And you know, not surprisingly, there's positives and there's negatives in that, right? Some of the positives are that it's cutting work time down for crunching data, right? All the all the obvious stuff at the hotel panel today, somebody made a great point about, you know, we are using AI and automated features because we are freeing up our human capital for their best and highest purpose, which is to be in front of our guests, right? So you think of it in some way like that, but then you can also look at the downside of it, which is financial. We talk about transparency, right? You can produce so many fake financial reports using AI, right? It's a way for fraud to continue to permeate. And the servicers talked about fraud a lot at this session. So those were some of my observations on AI. I know I'm not the only one who heard folks talking about it.

Jon Gaynor:

I want to chime in here. There was a billboard I saw in Times Square, which was like, stop hiring human workers. Yeah, yeah. So there's that. I think that that's going to be a thing to process. I personally use AI quite a bit. We have an internal tool at Dechert, DechertMind which, you know, can really make it a little easier. I think we're at the stage right now where AI is a booster toward productivity, but not a replacer toward productivity. You still need a human being to look at it. Because while it tries to be detail oriented, we are detail oriented. And I think that going through and checking to make sure that it's not hallucinating when it gives an answer or does a thing is very necessary. But that's not always going to be the case. It's going to be better than us at this eventually, and then the human element is going to be there.

Matt Armstrong:

I think a lot of AI right now is in the experimentation phase, right? So people are coming up with tools and trying to find use cases for it. But, you know, as people keep coming up with these tools, there's going to be ones that catch on and that really increase productivity greatly. And I guess the fear is that that could, you know, upend a

Unknown:

but now we're at the point where the productivity lot of employment for some people, if a tool comes along that's just great, and could possibly get rid of a whole industry or something, right? So we have no idea what's going to be coming in the future. It's kind of like the internet stocks or whatever when they first came out, right? There was all this expectation of large amounts of change. There was large amounts of change, but it took more time than people thought. But the amount of change has been enormous. I mean, look at something like Amazon, right? Like, people don't go shopping at stores as much as they used to. They buy everything online. So you got to expect that AI is going to have a similar long-run effect. So. gains are more apparent, and that they're there, that we're doing things, we're experimenting. It's a small shift, but I think a big one in a real sense.

Kate Mylod:

Well, I'll take this step further. I mean, I think that there are users of AI who are even beyond experimenting, who are actually are now building it into their productivity, right? Like I'm thinking of AI from a lawyer's perspective, right? Where I'm thinking, OK, how can it make drafting this document or annotating this term sheet, or, you know, doing this diligence easier? But lots of our clients, we've got underwriters and analysts. They're crunching numbers. They're looking for themes. They are in the granular, you know, dollars and cents, details, and I think AI is already performing there in a meaningful way.

Jon Gaynor:

Every major servicer has said that they're using AI to do their reporting. It happened on the servicers forum where they were all of them talked about how they're using it. It means that, like, it's really taking off. And I think all of them have said it turns around their reporting time.

Matt Armstrong:

We've also heard of the GSEs using AI to root out mortgage fraud as well. So they're, you know, checking all of their seller servicers, and, you know, seeing all the numbers that they're putting in, and I guess that the borrowers are putting in and running all this through AI, and it's, you know, hopefully able to find out any ones where there's fraudulent numbers, and they can catch those loans early on in the process, instead of later on after they've been securitized.

Jon Gaynor:

All right? Well, I think that takes us to the end of our top five takeaways from the CREFC annual conference in New York. So that brings us to our 4 Real High Fives. Is there anybody we'd like to recognize today? I think we've got a few.

Kate Mylod:

I'll lead us off on that. So we always like to track what our Decker four wheel podcast alum are up to. And Lea Overby, one of our recent podcast guests.

Jon Gaynor:

She was a year ago just about, actually.

Kate Mylod:

oh my God.

Jon Gaynor:

You're kidding, right? Time flies.

Kate Mylod:

I still have, like, that COVID brain warp going on. Maybe it's just I'm getting older. I can't vision board, and I have no idea how quickly time moves, which is why I've got to keep reading my books to hit my target this year. Anyway, LeaOverby was named the CREFC 2025 Woman of Distinction, and it was fabulous to see her get awarded this honor. Lea was on our podcast a year ago. She's a managing director and the head of CMBS research at Barclays, and we want to give her a great 4 Real High Five shoutout for that accomplishment.

Jon Gaynor:

And she continues to kick butt doing the industry leader roundtable.

Kate Mylod:

She was fabulous. And there were some fiery moments this year, which she did a great job with. Any other 4 Real High fives.

Jon Gaynor:

I'd like to recognize our partner, Nitya Kumar Goyal, who got recognized by CREFC for being their Top 20 Under 40. It's a big honor, and we are really proud of her for getting that and, you know, signals a bright future. She's in a good list, a good class of like, some clients and friends and competitors, and I think it's tremendous that she got that honor.

Kate Mylod:

Kudos to Nitya. That's awesome.

Jon Gaynor:

Yeah,

Stewart McQueen:

Can I give a High Five to Michael Scott for inspiring so much of my life? Or...

Jon Gaynor:

I like it!

Stewart McQueen:

I'm kidding. I'm joking.

Jon Gaynor:

All right, thank you to our audience for joining us for another episode of the Dechert 4 Real podcast. If you have any thoughts, please share them with us at our email inbox, realpodcast@dechert.com. Also, if you have any takeaways from CREFC that you think we should have covered, why don't you give us a five-star rating on whatever platform that you found this on and tell us about it? This episode was hosted by Stewart McQueen, Matt Armstrong, Kate Mylod and me, Jon Gaynor. Sam Gilbert helped produce it. Production support is by Kara Ray, Mallory Gorham, Alyssa Norton, Peggy Heffner, James Wortman and Jacob Kimmel. Our editor is Andy Robbins of AudioFile Solutions. Thanks for listening, and we'll see you next time on the Dechert 4 Real podcast. What do you call a beehive that you can't exit?

Kate Mylod:

I don't know. What do you call a beehive that you can't exit?

Jon Gaynor:

Unbelievable.

Stewart McQueen:

Oh, my dear.

Kate Mylod:

Why did the dad bring a ladder to the barbecue?

Jon Gaynor:

Why?

Kate Mylod:

Because he heard that the stakes were high. I thought that was pretty good.

Jon Gaynor:

I like it.

Kate Mylod:

Thank you, "Good Housekeeping" and Google.

Stewart McQueen:

I got one.

Jon Gaynor:

All right.

Stewart McQueen:

My dad wanted something groundbreaking for Father's Day, so I got him a shovel.

Jon Gaynor:

All right, Matt, you're the only one. Come on.

Matt Armstrong:

All right. When does a joke become a dad joke?

Jon Gaynor:

When?

Matt Armstrong:

When the punch line is apparent.

Jon Gaynor:

Golly.