For 2017, CMBS professionals are projecting CMBS originations of $75 billion. Last year, the group’s average prediction of $110 billion proved to be too optimistic. The pros feel more uncertain about 2017 forecasts compared with other years. The culprit is risk-retention. CMBS issuers have … [Read more...] about 1.2.17: … While Predictions for 2017 Are Flat at $75 Billion

Landlords of upscale properties across the United States are bracing for rough conditions in 2017 that will likely force them to slash rents and offer deep concessions as a glut of supply brings a seven-year luxury-apartment boom to an end. The Wall Street Journal reports that the turnaround follows … [Read more...] about 12.28.16: Luxury Apartment Demand Set to Fall in 2017

CMBS professionals are expecting the rule of supply and demand to positively impact CMBS bond prices in the first quarter of 2017. We previously reported that most CMBS issuers cleared out their inventory in anticipation of risk-retention rules effective December 24 (see our 12.7.16 article). This … [Read more...] about 12.23.16: Market Pros Expect CMBS Prices to Tighten

One of the primary causes of CMBS conduit loan defaults for commercial properties is the loss of income when a tenant occupying a large portion of the property vacates or defaults on its lease payments. Typically, when a large tenant stops paying rent, the income from the property is no longer … [Read more...] about 12.20.16: Structuring for Rollover Risk in CMBS Lending

In August, Indianapolis-based electronics and appliance retailer HHGregg announced that six stores in the Midwest, five stores in Wisconsin and one store in Illinois would close. Previously, the stores had been occupied by defunct retailers Circuit City and Linens & Things. Based on the chain’s … [Read more...] about 12.15.16: HHGregg Next in Long List of Struggling Retailers

In December 2015, Congress approved a change to the SBA 504 program to allow refinanced properties to be eligible for the program. Prior to the change, the program was available for purchase transactions only. The summary of the rules at time of approval in December were as follows: The commercial … [Read more...] about 12.3.16: SBA Improves Cash-Out 504 Refinance Program

10-year Treasury and Swap rates have moved up significantly since U.S. presidential election results on November 8. The following chart shows the move in the Treasury since the election. November 2016 Yield (%) 23 2.37 22 2.32 21 2.33 18 2.34 17 2.29 16 2.22 15 2.23 14 2.23 … [Read more...] about 11.26.16: Borrowers Adjusting to Higher Rates Post-Election

After six consecutive years of issuance growth, the CMBS market expansion came to an abrupt halt in 2016, according to Kroll Bond Rating Agency (KBRA). Private label CMBS is expected to end 2016 within a range of about $65-$70 billion, approximately 30% lower than 2015’s $95.8 billion. Despite what … [Read more...] about 11.23.16: KBRA Releases 2017 CMBS Outlook