CMBS market rebounds as lending standards loosen

Issuance of property-backed securities heating up in the second half of 2014

New York /
Dec.December 19, 2014 04:09 PM

Following a slow first half of the year, the commercial mortgage-backed securities market is seeing a flurry of activity as lending standards continue to ease up.

Since July 1, Wall Street firms have sold about $45.4 billion of securities backed by loans on properties ranging from shopping malls to apartment complexes. That’s compared to $37.4 billion in the first half of the year, Bloomberg reported. The bump up in CMBS issuance has coincided with insurance companies and commercial banks lowering lending standards as enthusiasm to finance U.S. real estate grows.

CMBS lenders that were squeezed out by the competition in early 2014 lowered rates and loosened guidelines, Jefferies Group analyst Lisa Pendergast told Bloomberg. “It was famine and then feast” in the CMBS market, she said.

The U.S. Office of the Comptroller of the Currency said in a report this week that the largest banks cited commercial real estate as a particular area of concern in an annual survey of lending standards.

Credit Suisse AG Group forecasts a rush of deals next year — up to $140 billion in 2015. Investor demand for riskier assets after six years of near-zero interest rates is helping revive the market, according to the website.[Bloomberg via Crain’s] Tess Hofmann


Related Articles

arrow_forward_ios
The rate of loans sent to special servicers continued to fall in March. (Unsplash)
CMBS special servicing rate declines in March
CMBS special servicing rate declines in March
Douglas Durst with 1133 Avenue of the Americas (left) and 114 West 47th Street (Google Maps, Getty)
Durst refinances two Midtown buildings with $1.1B CMBS loan
Durst refinances two Midtown buildings with $1.1B CMBS loan
Vornado's Steve Roth. (Getty, Google Maps)
Here’s what tenants are paying at Vornado’s 909 Third Avenue
Here’s what tenants are paying at Vornado’s 909 Third Avenue
David Wolkoff of G&M Realty. (Getty, 5Pointz LIC)
Wolkoff family firm snags $350M loan for 5Pointz
Wolkoff family firm snags $350M loan for 5Pointz
(iStock/Illustration by Kevin Rebong for The Real Deal)
Investors pile into house-flipping
Investors pile into house-flipping
The luxury Beekman Tower in Midtown East is now worth nearly half its $146 million valuation from 2018. (Beekman Tower)
Value of Beekman Tower cut by 45% in new appraisal
Value of Beekman Tower cut by 45% in new appraisal
The Promenade on the Peninsula in Rolling Hills Estates, California (Google Maps, iStock)
Landlords take on short-term debt to spruce up struggling assets
Landlords take on short-term debt to spruce up struggling assets
Crystal Mall in Waterford, Connecticut  (Crystal Mall via Facebook, Getty)
Simon’s Connecticut mall valuation slashed by 88%
Simon’s Connecticut mall valuation slashed by 88%
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...