Commercial real estate properties owned by a business that operates out of the buildings it owns are generally not eligible for CMBS loans. Financing related to these transactions is often referred to as “owner-occupied” loans and is often provided by commercial banks and the SBA with recourse to … [Read more...] about 1.20.17: How to Qualify for CMBS: From Owner-Occupied to Investment Property

The press had a field day this week reporting that a Pennsylvania mall that was foreclosed on after its owners failed to repay $143 million was auctioned off for $100. The 1.1-million-square-foot Galleria at Pittsburgh Mills was secured by a CMBS conduit loan with additional mezzanine financing. The … [Read more...] about 1.18.17: CMBS Mall Sells for $100 – A Great Headline, But Not the Full Story

According to Daniel H. Lesser, LWHA, “To the surprise of many, the U.S. lodging industry closed out 2016 with operating metrics still at record setting levels; however, its growth trajectory was notably lower when compared with years past. In general, occupancy levels have peaked and any short-term … [Read more...] about 1.9.17: Hotels Send Mixed Signals for 2017

For the first time since the financial crisis of 2008-2009, CMBS conduit issuance declined for the year. CMBS volume totaled $76 billion in 2016, down a whopping 25% from 2015’s $101 billion. Atypically, no single capital market disruption was a precursor to a decline. In 1999, volume declined when … [Read more...] about 1.6.17: U.S. CMBS Originations for 2016 Total $76 Billion

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