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 performances were unaffected by the impact of COVID-19.
The next CMBS issue is being offered by bookrunners Citigroup, Goldman Sachs, Deutsche Bank and JPMorgan. The $1.11-billion offering includes 40 loans secured by 175 properties. The offering contains a mix of loans closed before and after the COVID-19 outbreak. Average loan size approximated $27.7 million, and the average loan interest rate is 3.60%. The offering features office, industrial, hospitality and mixed-use loans. The benchmark AAA-rated super senior class is expected to price at roughly 95-105 basis points over swaps, in line with other recent CMBS offerings. The Citigroup deal follows four prior CMBS deals that priced in July and 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 4.00%-4.25% for full-leverage transactions and 3.75%-4.00% for low leverage transactions.