Andrew Solomon, a real estate debt professional at Angelo Gordon & Co.

Wall Street’s affinity for commercial mortgage-backed securities is waning, according to Bloomberg News, and that could make it more difficult for developers and investors to obtain financing for their deals.

The bond market was more volatile last week than at any point since January, amid renewed fears stemming from a European debt crisis. That volatility makes it more difficult for CMBS issuers to determine the demand for their securities. As a result, the spread between CMBS yields and Treasury note yields are increasing and indexes tied to lower-rated bonds are falling to their lowest levels in six months. [more]

As demand for distressed U.S. commercial assets crescendos, UBS is shopping a pool of failing commercial mortgages with a face value of $1.5 billion, Bloomberg News reported. Bids for the portfolio are due Wednesday. [more]

source: Trepp

The nationwide delinquency rate for commercial mortgages spiked in March, rising well past the 12-month average and to a five-month high. In its March 2012 U.S. Commercial Mortgage-Backed Security Delinquency Report, Trepp measured the delinquency rate to be 9.68 percent, up from 9.37 percent in February and 9.42 percent in March 2011. [more]

Jamie Woodwell

The amount of outstanding commercial and multi-famly mortgage debt declined 1.6 percent between the second and first quarters of the year, according to the Mortgage Bankers Association. The debt dropped to $3.24 trillion in the second quarter, a $52 billion decrease from the first quarter’s outstanding debt. Jamie Woodwell, a vice president with the MBA, said that the figures indicate tepid demand for commercial and multi-family loans. “Demand for commercial and multi-family mortgages, while increasing, remained weak in the second quarter and contributed to the continuing trend of loans paying down and paying off faster than new ones replace them,” Woodwell said. TRD

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MBA’s Jamie Woodwell

The amount of outstanding mortgage debt in the commercial and multi-family sectors nationwide decreased to $3.31 trillion in the first quarter of the year, dropping $31 billion from the fourth quarter of 2009, according to the Mortgage Bankers Association. The decline marks a .9 percent quarter-over-quarter reduction in the total amount of commercial and multi-family mortgage debt nationwide. Despite this relatively flat level of activity, Jamie Woodwell, vice president of commercial real estate research with MBA, said that he believes more borrowers are making the effort to pay down their debts. “Low levels of commercial mortgage borrowing mean that property investors are paying off… more in mortgages than they are taking out,” Woodwell said. TRD

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MBA’s Jamie Woodwell

The amount of outstanding mortgage debt in the commercial and multi-family sectors nationwide decreased to $3.31 trillion in the first quarter of the year, dropping $31 billion from the fourth quarter of 2009, according to the Mortgage Bankers Association. The decline marks a .9 percent quarter-over-quarter reduction in the total amount of commercial and multi-family mortgage debt nationwide. Despite this relatively flat level of activity, Jamie Woodwell, vice president of commercial real estate research with MBA, said that he believes more borrowers are making the effort to pay down their debts. “Low levels of commercial mortgage borrowing mean that property investors are paying off… more in mortgages than they are taking out,” Woodwell said. TRD

[more]

Source: FDIC

The rate of default on U.S. commercial mortgages jumped to 4.17 percent in the first quarter of the year, up from 3.83 percent in the fourth quarter of 2009, according to a report released yesterday from real estate tracking firm Real Capital Analytics. This rate marks the highest level recorded since 1992, when this data was first recorded and the default rate was at 4.55 percent. The first-quarter 2009 figure is significantly higher than that recorded in the pre-recession years — the first half of 2006 saw an average commercial mortgage default rate of 0.58 percent. In total, $45.5 billion worth of bank-held commercial mortgages were in default, according to Real Capital Analytics. Multi-family mortgages performed worse than other types of commercial loans, according to the report, with a default rate of 4.62 percent, up from 4.41 percent during the last quarter of 2009. This default rate is the highest recorded, exceeding the previous all-time high of 4.17 percent seen in 1993, the report says. The first quarter saw a total of $9.9 billion worth of multi-family mortgages in default. TRD

[more]

Source: FDIC

The rate of default on U.S. commercial mortgages jumped to 4.17 percent in the first quarter of the year, up from 3.83 percent in the fourth quarter of 2009, according to a report released today from real estate tracking firm Real Capital Analytics. This rate marks the highest level recorded since 1992, when this data was first recorded and the default rate was at 4.55 percent. The first-quarter 2009 figure is significantly higher than that recorded in the pre-recession years — the first half of 2006 saw an average commercial mortgage default rate of 0.58 percent. In total, $45.5 billion worth of bank-held commercial mortgages were in default, according to Real Capital Analytics. Multi-family mortgages performed worse than other types of commercial loans, according to the report, with a default rate of 4.62 percent, up from 4.41 percent during the last quarter of 2009. This default rate is the highest recorded, exceeding the previous all-time high of 4.17 percent seen in 1993, the report says. The first quarter saw a total of $9.9 billion worth of multi-family mortgages in default. TRD

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Jamie Woodwell

Commercial and multi-family loan originations were up 12 percent in the first quarter nationwide, compared to the same quarter a year earlier, but down 26 percent from the fourth quarter of 2009, according to the Mortgage Bankers Association. While there was a quarter-over-quarter drop, Jamie Woodwell, the vice president of commercial real estate research with MBA, said it’s too early to make assumptions about the market’s momentum. “It’s hard to draw conclusions based on first-quarter numbers given seasonal effects, such as the industry’s usual push to finalize deals before the end of the year, resulting in lower first-quarter origination activity,” Woodwell said. Several sectors saw marked increases in the number of loan originations year-over-year, including retail properties, which saw a 98 percent increase, office properties, which saw a 29 percent increase, and multifamily properties, which law loan originations climb 5 percent. Three types of commercial properties, including industrial, hotel and health care, saw drops of 28 percent, 46 percent and 68 percent, respectively. Overall, Woodwell said that lenders might be loosening up, a strong sign, despite the market’s relative lethargy. “There appears to be increasing capital available for commercial mortgages, but only limited demand for new mortgages from commercial and multifamily property investors,” Woodwell said. TRD

[more]

Despite the all-time high delinquency rates seen among commercial mortgages, more lenders are showing optimism toward the commercial mortgage-backed securities market, and are gingerly buying up shares in the real estate investment trusts that own those loans, according to the Wall Street Journal. And their positive outlook might be justified — overall, REITs are up about 16.7 percent so far this year and some commercial-mortgage REITs, like iStar Financial and Arbor Realty Trust have made strides as well, up 140 percent and 113 percent so far this year, respectively, according to the Wall Street Journal. But Jason Yablon, a vice president with investment firm Cohen & Steers, said that the positive momentum needs to be taken with a grain of salt. “Because the stock has been beaten down, any incremental good news [about] the financing environment is going to make the stock move a lot,” Yablon said.