CMBS market rebounds as lending standards loosen

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

TRD 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
Starwood's Barry Sternlicht and Pacific Retail's Steve Plenge with Parkway Plaza mall in San Diego and the Plaza West Covina mall in Los Angeles (Getty, Starwood, Pacific Retail)

Last bidder standing has big plans for Starwood’s troubled mall portfolio. But first, creditors must sign off

Last bidder standing has big plans for Starwood’s troubled mall portfolio. But first, creditors must sign off
Jared Chupaila, CEO of Brookfield Properties’ retail group, with Florence Mall and Fashion Square (Brookfield, TripAdvisor, iStock)

Brookfield and Namdar plan to hand over keys to struggling malls

Brookfield and Namdar plan to hand over keys to struggling malls
With about $23 billion of hotel-related CMBS loans in forbearance, more lenders are looking to offload those mortgages. (iStock)

Hotel industry is in trouble and more lenders want out

Hotel industry is in trouble and more lenders want out
Matt Salem, KKR head of real-estate credit (Getty; KKR)

Hotel and retail mortgages dragging down recovery

Hotel and retail mortgages dragging down recovery
The number of single-family homes on the market hit historic lows in July, driving prices up (iStock)

US housing supply reaches nearly 40-year low

US housing supply reaches nearly 40-year low
The rates for a 30-year fixed-rate mortgage dropped 7 percentage points for the week ending September 10, reaching 2.86 percent. (iStock)

Mortgage rates notch new low

Mortgage rates notch new low
The special servicing rate has increased each month since the coronavirus pandemic hit the United States, and clocked a 55 basis point increase to 10.04 percent in August (iStock)

CMBS delinquencies fell, but hold the applause

CMBS delinquencies fell, but hold the applause
BMO Capital Markets CEO Dan Barclay and Paul Vanderslice (BMO, LinkedIn)

Ex-CCRE head Paul Vanderslice joins BMO Capital Markets

Ex-CCRE head Paul Vanderslice joins BMO Capital Markets
arrow_forward_ios

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

Loading...