NEW YORK CITY-Today’s CMBS market, says Joseph Franzetti, senior vice president at Berkadia Commercial Mortgage LLC, is somewhat like the dating game. “We had a lot of fast money buying these securities, and when they saw a better opportunity, they took it,” Franzetti said. “And like a person who found a better date, they left you standing by yourself.”

That leaves lenders and investors high-and-dry with CMBS 3.0, the latest cycle in the world of commercial mortgage-backed securities. Lenders, investors and legal counsel from Ballard Spahr LLP, Berkadia, PNC, Schulte, Roth & Zabel LLP, the Shooshan Company and UBS Securities LLC discussed at the Information Management Network’s Real Estate General Counsel’s Forum that despite signs of improvement, the CMBS pipeline is narrowing and spreads are continuing to widen.

“The pipeline was $10 to $12 billion and is down to $2 billion to $4 billion,” said Christopher C. Reilly, managing director at UBS Securities LLC. He explained that much of the reduction is related to the volatility in the stock market after ratings agency Standard & Poor’s downgraded the US credit rating and yanked $1.5-billion in commercial mortgage-backed securities off the market due to new regulations criteria in the summer.