The significant amount of CMBS conduit loan maturities in 2016-2017 will provide an unprecedented opportunity for CMBS conduit loan mortgage brokers to increase their origination volume.
“Recently, Jim Brett, our CMBS bond analyst and head of CMBS conduit loan underwriting at ValueXpress, performed a sort through our Trepp database of all existing CMBS conduit loans. He wanted to quantify the amount of loans maturing in the 2016-2017 time frame,” commented Michael D. Sneden, Executive Vice President at ValueXpress. “The results are impressive.”
The large amount of loan maturities stems from the aggressive underwriting and high property values prevalent in 2006-2007 that resulted in record CMBS origination levels of $198 billion in 2006 and $228 billion in 2007. The three-year period of 2005-2007 was the only one in which U.S. CMBS loan originations exceeded $100 billion. Since most of the loans have a 10-year term, the majority is maturing in 2016-2017.
The results of Brett’s search are provided in the table below:
Maturing CMBS Loans (billions)
“Throughout 2015, we have been mining the Trepp database to find well-performing CMBS conduit loans and get in touch with owners to help them navigate through a CMBS conduit loan refinance,” commented Sneden. “We completed many CMBS conduit loan refinances of maturing CMBS loans in 2015, but we expect the pace to accelerate in 2016 and 2017.”
“Depending on property location, we are assigning these maturing loans to our local field offices or to CCTG graduates to make personal contact with owners,” noted Brett. “Although we are in the age of the internet with less ‘personal interaction,’ CMBS conduit borrowers still want to meet ‘face-to-face’ to build trust and confidence that their deals will get done.”