Top Takeaways: 2024 MBA Commercial Servicing & Tech Conference 

The Mortgage Bankers Association held its annual conference for commercial real estate servicing professionals in New Orleans earlier this week. This year’s event attracted the largest audience ever, 936 professionals, for two and a half days of meetings. The difficulty obtaining insurance dominated the conference, but other key takeaways included:  

• Insurance Challenges: The conference, featuring industry-leading experts, shed light on significant increases in insurance costs and the difficulties in securing proper coverage. Key factors discussed included reset replacement values, increased catastrophic losses due to climate change, and capacity tightness in the reinsurance market. One expert predicted stabilization of annual insurance increases to 12-15% year over year as the replacement value reset is behind us and capacity increases in the reinsurance market. Climate Change and insurance losses due to CAT coverage will continue to be an industry challenge.  Layered insurance may offer more flexibility and protection as a tool to protect lenders and borrowers. 
• Regulatory and Market Challenges: Regulatory pressures continue with building and efficiency standards, rent control debates, and ESG data reporting requirements. The vintage of acquisition is emerging as a key differentiator, with property prices retreating to early 2020 levels and office valuations continuing to fall.  
• Office Market Concerns: There continues to be concern over the future of office properties, especially with large leases nearing expiration. Tenants are expected to downsize, increasing pressure on landlords to offer amenities or concessions. The peak of defaulted office loans is yet to come, with some predicting the office market may not stabilize until around 2030. Experts predict that the largest office loans will have more issues than smaller office properties. 
• More Difficulty with Loan Extensions: Many loans were extended in 2023, and there is a large wave of maturities in 2024. Lenders and bond investors are growing more restless, and there is a lot of discussion about dealing with issues now rather than pushing things out to 2025 or longer. 
• Cybersecurity and Data Security: Cybersecurity remains a top priority, with a shift towards using portals for document transmission and increased scrutiny on vendor compliance. Cyber risk is anticipated to be a complex issue for servicers in the coming years.  
• Workforce and Technology: Turnover challenges have been mitigated, and investments in training and technology are driving productivity. There is excitement around AI’s potential to drive future efficiencies. Companies have adapted to hybrid and remote work. 

Jason Berry
Chief Operating Officer
jberry@slatt.com

Elizabeth Burnett
Managing Director – Loan Servicing
elizabeth.burnett@slatt.com