With interest rates trending down and investors scrambling to find investments that provide a reasonable amount of steady, secure income, demand for REIT stocks has risen dramatically as investors snap up shares of successful REITs. A good example is the shining star of the net lease sector, Realty … [Read more...] about 6.1.16: REIT Valuations Soar
5.27.16: CMBS Lenders Test Risk-Retention Structures
Effective December 24, 2016, CMBS issuers -- or B-piece buyers in their stead -- will be required to retain 5% of transactions for at least five years. CMBS issuers can retain a “vertical strip” encompassing 5% of every tranche, a “horizontal” 5% strip at the bottom of the capital stack, or an … [Read more...] about 5.27.16: CMBS Lenders Test Risk-Retention Structures
5.24.16: CMBS Spreads Decline Due to Lack of Supply
CMBS spreads continue to decline as the pace of new CMBS issuance falls well behind last year. U.S. CMBS volume as of late May was $28.5 billion versus $44.1 billion at the same time last year. Volume has fallen due to significant CMBS spread widening that reversed course in the beginning of March … [Read more...] about 5.24.16: CMBS Spreads Decline Due to Lack of Supply
5.17.16: deadmalls.com
When I first began to analyze CMBS bonds with my associate, Jim Brett, he discovered a website called deadmalls.com. There are a lot of mall loans in CMBS, and in 2008, when Jim and I began analyzing distressed CMBS for our affiliate, Country Bank, we were trying to get a handle on the difference … [Read more...] about 5.17.16: deadmalls.com
5.13.16: How Drugstore Loans Are Viewed in CMBS
A significant amount of drugstore loans are in CMBS, and they are dominated by stores leased to the top three U.S. drugstore chains: Walgreens, CVS and Rite-Aid. All of the drugstores are corporately operated (no franchises). Few, if any, drugstore buildings are owned by the three chains. The real … [Read more...] about 5.13.16: How Drugstore Loans Are Viewed in CMBS
5.10.16: Walgreens and Rite Aid Merger CMBS Underwriting Considerations
In November 2015, Walgreens entered into a contract to buy Rite Aid for $17 billion. The transaction is being reviewed by regulators as the combination of the nation’s number one and number three drugstore chains could be anti-competitive. Walgreens has indicated it has buyers lined up for unwanted … [Read more...] about 5.10.16: Walgreens and Rite Aid Merger CMBS Underwriting Considerations
5.6.16: Self-Storage in High Demand in New York City
With tiny, expensive apartments and a lot of stuff, decluttering may be what New Yorkers talk about, but what they really do is rent more space. And self-storage companies and real-estate investors are ready and waiting to fill the demand. New York City is packed with customers who see storage … [Read more...] about 5.6.16: Self-Storage in High Demand in New York City
4.29.16: CMBS Prices Stable (and That’s a Good Thing)
CMBS spreads for the benchmark AAA-rated super senior CMBS bonds remained range bound in the vicinity of 130 basis points (bp) over swaps. A recent deal priced below that level and a new deal in the market provided price guidance at the 130 bp level. On Friday, April 22, Morgan Stanley and Bank of … [Read more...] about 4.29.16: CMBS Prices Stable (and That’s a Good Thing)
4.26.16: Commercial and Multifamily Originations Flatline in the First Quarter
The first quarter of 2016 was something of a dud for commercial and multifamily originations, according to new data from the Mortgage Bankers Association (MBA). The MBA “Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations” found originations for this sector fell 38% from the … [Read more...] about 4.26.16: Commercial and Multifamily Originations Flatline in the First Quarter
4.20.16: Retail Property Cap Rates Rise in the First Quarter
The average cap rate for retail properties nationwide moved up 11 basis points (bp) between the fourth quarter of 2015 and the first quarter 2016, to 6.59%, according to a recent report from commercial real estate services firm CBRE. Still, the figure represented a 13 bp year-over-year decrease. … [Read more...] about 4.20.16: Retail Property Cap Rates Rise in the First Quarter
