![\"\"](\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/05\/Deloitte.jpg\" "\\"Deloitte\\"")
<\/a><\/p>\nNEW YORK – Deloitte hosted its second annual Distressed Debt & Assets symposium at the New York Athletic Club on Tuesday, May 10. The last meeting was in January 2010, and needless to say the climate has improved since then.
\nPimm Fox, anchor of Taking Stock on Bloomberg Television, moderated the morning\u2019s keynote discussion featuring Adam Metz, senior advisor at TPG Capital and former CEO at General Growth Properties Inc., and Martin Fridson, global credit strategist at BNP Paribas Asset Management Inc. <\/p>\n
The general consensus was that the economy, while on a slow path of recovery with the addition of 250,000 jobs each month, is showing signs of life, though not necessarily a strong return. Martz believes that investors and economists should not put as much emphasis on such monthly data as they have been, and should instead focus on the bigger picture.<\/p>\n
\u201cIt is easy to get caught up in the minutiae,\u201d he said. \u201cMonth by month there is all sorts of variation, but when you step back, you can see we are on this slow steady path of improvement.\u201d <\/p>\n
Now is a safe time to use distressed debt to gain leverage, according to Fridson, simply because the risk of a defaulting a leveraged buyout (LBO) is historically low. <\/p>\n
\u201cRight now investors are willing to take credit risks,\u201d Fridson said. \u201cThe risk of defaulting in the corporate market is well below historical values and is projected to go lower. Refinancing is so easy that any company can really roll over debt. The large LBOs over the last few years have been refinanced; the only ones that are defaulting are the ones like Borders and Blockbuster where no one believes that the business model is viable. Overall this environment is pretty difficult for companies to fail.\u201d <\/p>\n
Metz was able to weigh in on the topic and used the opportunity to speak on what General Growth Property\u2019s meltdown and rebirth looked like from the captain\u2019s seat. He attests that the firm\u2019s quick recovery after filing for Chapter 11 makes GGP a poster child for how well the process works. GGP filed the largest real estate bankruptcy case since 1980 in 2009 (a result of carrying $25 billion in debt) but reorganized and reemerged in November 2010. Metz said that the collapse of the credit market was largely to blame. <\/p>\n
\u201cThe events of 2008 really accelerated the process,\u201d he said. \u201cIt was like playing whack-a-mole. You are putting out a fire here, and another one starts over there. We had a hard time dealing with multiple borrowers and creditors. We worked hard to stay out of bankruptcy. It is a room that once you walk in you can\u2019t say \u2018oops\u2019 and turn around. In hindsight it was probably the best thing for all the constituents. It was like a timeout. It gave us a breather to develop and present a plan for the enterprise that worked for everybody.\u201d <\/p>\n
The second half of the morning saw a panel discussion with market participants on the impact of Government regulation, the role of private capital in getting broader market resolution, whether or not banks are ready to work together, and what we can learn from the past 18 months about where the distressed debt market is headed. A reoccurring theme was how isolated the recovery has been over the past year, both in credit and real estate markets. <\/p>\n
\u201cI think we have to recognize that there is a bifurcation in the market, that the inflow of capital is targeted towards the bigger names,\u201d said Sabeth Siddique, director, Deloitte & Touche L.L.P. \u201cBut that is not where the problem lays. The problem is in the small bank spaces\u2014that is what is clogging up the economy. CMBS is going towards the Rockefeller Centers, but that is only a small portion. That is a good use, but it has to spill over into the main street in Middle America, and it is just not happening quickly enough.\u201d <\/p>\n
Federal regulations to help improve the debt market have had a marginal impact, but the consensus seemed to be that time may prove to be the best healer. <\/p>\n
\u201cOn the short run, the programs from the Fed were helpful,\u201d said David Ying, senior managing director, Evercore Partners. \u201cBut I think it is important to consider that as good as the capital markets may feel, clearly it is a fragile environment with unemployment growing so slow.\u201d <\/p>\n
The panel also discussed the need for additional financial programs from the government. Siddique believes that the pulling of such \u2018economic levers\u2019 is warranted, especially since they can determine what can really be done to improve macroeconomic conditions. <\/p>\n
\u201cThe fact that they are pulling that QE2 lever is a good sign,\u201d Siddique said. \u201cI don\u2019t think they would have done it if they thought the market\u2019s reaction would be negative.\u201d <\/p>\n
The cautious optimism and notion of a slowly recovering market that filled the air reinforced what everyone hopes is true\u2014the doom and gloom prospects of a double-dip recession are a thing of the past. <\/p>\n","protected":false},"excerpt":{"rendered":"
The general consensus was that the economy, while on a slow path of recovery with the addition of 250,000 jobs each month, is showing signs of life, though not necessarily a strong return.<\/p>\n","protected":false},"author":936,"featured_media":1004029350,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21808,21825,21742],"tags":[],"class_list":["post-1004029349","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-featured","category-finance","category-latest"],"acf":[],"yoast_head":"\n
Deloitte Symposium Waxes Positive - Commercial Property Executive<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.commercialsearch.com\/news\/deloitte-symposium-paints-positive-picture\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Deloitte Symposium Waxes Positive\" \/>\n<meta property=\"og:description\" content=\"The general consensus was that the economy, while on a slow path of recovery with the addition of 250,000 jobs each month, is showing signs of life, though not necessarily a strong return.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.commercialsearch.com\/news\/deloitte-symposium-paints-positive-picture\/\" \/>\n<meta property=\"og:site_name\" content=\"Commercial Property Executive\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/CPExecutive\" \/>\n<meta property=\"article:published_time\" content=\"2011-05-12T14:00:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-12-09T04:38:02+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.commercialsearch.com\/news\/wp-content\/uploads\/sites\/46\/2011\/05\/Deloitte.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"480\" \/>\n\t<meta property=\"og:image:height\" content=\"269\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Allison Landa\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@cpexecutive\" \/>\n<meta name=\"twitter:site\" content=\"@cpexecutive\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-symposium-paints-positive-picture\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-symposium-paints-positive-picture\\\/\"},\"author\":{\"name\":\"Allison Landa\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/#\\\/schema\\\/person\\\/0eb45390ae3124c14a919b7ec7bd2249\"},\"headline\":\"Deloitte Symposium Waxes Positive\",\"datePublished\":\"2011-05-12T14:00:38+00:00\",\"dateModified\":\"2022-12-09T04:38:02+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-symposium-paints-positive-picture\\\/\"},\"wordCount\":849,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-symposium-paints-positive-picture\\\/#primaryimage\"},\"thumbnailUrl\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/wp-content\\\/uploads\\\/sites\\\/46\\\/2011\\\/05\\\/Deloitte.jpg\",\"articleSection\":[\"Featured\",\"Finance\",\"News\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-symposium-paints-positive-picture\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-symposium-paints-positive-picture\\\/\",\"url\":\"https:\\\/\\\/www.commercialsearch.com\\\/news\\\/deloitte-symposium-paints-positive-picture\\\/\",\"name\":\"Deloitte Symposium Waxes Positive - 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