In its ongoing Dodd-Frank rule hearings, the House of Representatives had several commercial real estate players on hand to testify about potential consequences of the proposed legislation. According to the New York Observer, CRE Financial Council President Paul Vanderslice, who also serves as a managing director at Citigroup Global Markets, made the same case against the law that several real estate analysts voiced to The Real Deal in an examination of the rule’s impact on commercial real estate in the July issue.
Like those analysts, Vanderslice argued a provision that requires lenders to establish cash reserves to cover losses from securitizations would significantly decrease activity among CMBS loan originators, which are needed more than ever as $2 trillion of real estate debt nears its maturity date.
On the other hand, the controversial Volcker rule, which limits speculation by consumer banks, drew support from Anne Simpson, senior portfolio manager for CalPERS. She was one of five other real estate witnesses who testified during the hearing, which continues tomorrow with testimony on Dodd-Frank’s affect on residential mortgages.
CalPERS, which is the largest U.S. pension fund with $232 billion in global assets, lost $70 billion during the financial crisis — including $500 million from its investment in Stuyvesant Town — and as a result, Simpson said the fund supports Dodd-Frank and wants improved transparency. But experts had previously told The Real Deal that the Volcker Rule would consolidate the investment market and put it almost entirely in the hands of private equity firms. [NYO]