From January through March 2013, $22.9 billion of commercial mortgage-backed securities were issued, up almost fourfold from a year earlier, according to Commercial Mortgage Alert. That puts volume on pace to surpass $90 billion for the year, well above the $65-billion average prediction by a panel of CMBS professionals.
The first-quarter volume was the largest for any quarter since 2007’s fourth quarter and exceeded the previous post-crash high of $17.5 billion in 2012’s fourth quarter. There were 32 U.S. transactions from January to March, surpassing quarterly totals during the boom years. The number of issues reflects the unusually high number of single-borrower transactions, which inflated the total. Indeed, the 16 single-borrower offerings exceeded the 10 multi-borrower deals (the remaining six transactions fell into different categories). In contrast, there were only six single-borrower deals in all of 2006 and just two in 2007.
“We are tracking the overall market in terms of originations,” commented Michael D. Sneden, Executive Vice President at ValueXpress. “We are going to finish the first quarter just shy of $100 million of production, giving us an annual run-rate of $300-$400 million, typical of what we saw in the 2005-2007 period. The difference is we are better equipped to handle the volume, keeping loan closings tightly bound in a 40- to 50-day range to make sure our clients grab these great rates.”