CMBS volume to rise in 2011: Moody’s

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The volume of new U.S. commercial mortgage-backed securities issued is projected to rise to $37 billion this year, Moody’s Investors Service said in a report today. According to the report, the highest end of the market is rebounding most quickly, with prices for trophy assets already on the rise. But the recovery isn’t in full speed yet, with small property prices flat-lining and distressed property values falling further still, Moody’s said. CMBS delinquencies are predicted to increase to between 9.5 percent and 11 percent by the end of the year, with a 20 percent rate for loans in special servicing. “The
combination of borrowers seeking low interest rates and investors seeking
higher yield led to a three-fold increase in issuance in 2010 over 2009,
with deal size and deal diversity also increasing,” said Nick Levidy, managing director at Moody’s. “Based on what is already in the pipeline, we anticipate those trends to continue and accelerate in 2011.” TRD