ValueXpress is actively seeking new CMBS conduit loans as recent CMBS bond offerings are being well received by investors. We are seeking multifamily, manufactured housing community (MHC), self-storage, industrial, retail and office loans. Hotels remain on pause unless their performance was unaffected by the impact of COVID-19.
Recently, bookrunners Wells Fargo, Credit Suisse, UBS and Barclays announced a new multi-borrower CMBS conduit deal that was expected to price the week of May 27. The $731.1-million offering included 46 loans secured by 64 properties, most of which were closed prior to COVID-19. Loans were originated by seven lenders in total, including the four bookrunners. Average loan size approximated $15 million, and the average loan interest rate was 3.77%. The offering features multifamily, MHC, self-storage, office and retail loans. The benchmark AAA-rated super senior class is expected to price at roughly 145 basis points over swaps. The Wells deal follows three prior CMBS deals that priced in May from JP Morgan, Deutsch Bank and Goldman Sachs that featured investment-grade loans that were well received in the market.
“This transaction is another step forward in the quick recovery of the CMBS securities market,” commented Michael Sneden, Executive Vice President at ValueXpress. “What’s important is that the Wells deal contains plain-vanilla CMBS conduit loans. The two deals prior had investment-grade loans that were not comparable with the loans that ValueXpress originates.”
As a result of these successful transactions, interest rates on CMBS conduit loans are steadily drifting down. Rates are 4.25%-4.50% for full-leverage transactions and 4.00%-4.25% for low leverage transactions.