CMBS Market Coming Back

Posted November 11, 2010

In California, Commercial, investing, Lending, Ohio

There’s lots of mildly positive news here. It’s been about three years since I’ve been able to say that.

In previous posts, I think I’ve covered thoroughly the positive impact that the election will likely have on the commercial real estate market. If the 111^th congress approves the Bush tax cut extensions for a substantial length of time I think we will have much of the certainty this market needs. We might be off to the races for 2011.

The CMBS market is still fragile, but coming back and delinquencies have dropped.

The key points that CoStar’s Mark Heschmeyer makes are:

CMBS issuance will hit $15 billion this and could rise to $35 billion in 2011. This is still down substantially from the $207 billion in 2007
CMBS delinquencies have dropped 88 basis points to 7.78% in 2010
Only $304 million of hotel-related loans have become newly delinquent. That brought the delinquency rate down from 21.13% to 14.14%
Of the $6.6 billion in resolutions last year, $4.4 billion were hotel loans.
By property type the current delinquencies are: multifamily: to 14.57% (from 14.45%); hotel: 14.14% (from 21.31%); retail: 6.25% (from 6.10%); industrial: 5.83% (from 5.79%); office: 5.38% (from 5.48%). Hotels took the dive first and are also coming out of this the quickest.

For more detail see Mark’s complete article at the link.

Has the CMBS Market Finally Turned the Recessionary Corner

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