CMBS

  • Eighth straight drop for CMBS delinquencies

    The Trepp US CMBS delinquency rate decreased by 18bp to 7.25% in January, marking the eighth straight month of improvement. The decrease can be attributed to the almost US$1.3bn in previously delinquent loans that were resolved with losses over the course of the month.

    By removing these delinquent loans from the numerator, the rate saw 24bp of improvement. Loans that .......

    News Round-up 5 February 2014

  • Varied lease renewal rates in US CMBS

    US CMBS credit quality has improved in many ways, but upcoming lease expirations continue to provide a potential source of downside shock. While they are difficult to calculate and predict, certain factors appear to make non-renewals more or less likely.

    The probability of a lease renewal depends on the asset and the tenant. Certain property types and geographies appear to .......

    News 4 February 2014

  • Share of specially serviced loans down

    The improving economy has driven a drop in delinquency rates and a decrease in the share of loans in special servicing, according to Moody's Q413 US CMBS and CRE CDO surveillance review. The agency's base expected loss for conduit/fusion transactions fell to 8.95% in the fourth quarter from 9.01% the previous quarter. Its Commercial Mortgage Metrics (CMM) weighted average base .......

    News Round-up 3 February 2014

  • Loss severity pushes up

    US CMBS liquidation volume remained steady in January at US$1.28bn, but several large losses pushed the average loss severity up significantly, according to Trepp. Of the loans that were liquidated, 94% fell into the greater than 2% loss severity category.

    Overall January loss severity came in at 58.51%, up from December's 50.36% and more than 10 percentage points higher than .......

    News Round-up 3 February 2014

  • Majority of non-defaulted loans to refinance

    An estimated 86% of the US$16.4bn in Fitch-rated non-defaulted commercial mortgage loans with maturities in 2014 is expected to be able to refinance. Assuming a current market mortgage rate of 5% and a 30-year amortisation schedule, loans that have a debt service coverage ratio of at least 1.25x should be able to refinance.

    Approximately US$15.4bn of the maturing loans have .......

    News Round-up 3 February 2014

  • CRE borrowers surveyed

    The CRE Finance Council (CREFC), in collaboration with FPL Associates, has conducted a survey of commercial real estate borrowers to better understand their decision drivers in choosing a lender. The survey results also reveal borrower sentiment regarding lender competitiveness.

    Among the key take-aways from the survey is that 43% of respondents expect to target commercial banks for funding in 2014 .......

    News Round-up 3 February 2014

  • CMBS servicing merger completed

    Mount Street has acquired Morgan Stanley Mortgage Servicing (MSMS). The acquisition gives the commercial real estate loan servicer a significantly larger CMBS platform.

    The MSMS team is located in London and Frankfurt and provides servicing on commercial loans and CMBS in the UK, France, Germany, Italy, Netherlands, Belgium and Switzerland. Mount Street ceo Ravi Joseph was head of European securitisation .......

    Job Swaps 30 January 2014

  • Starwood bid surprises to the upside

    Starwood Capital has confirmed its successful bid for a pool of REO assets in the CWCapital Asset Management CMBS auction (SCI 16 January). The pool - which was acquired for US$191m - comprises seven office assets (representing 1.3 million square-feet) and four retail assets (representing 295,000 square-feet), with a cumulative unpaid principal balance of US$310.3m.

    A Morgan Stanley analysis implies .......

    News Round-up 30 January 2014

  • High-LTV loan resolutions eyed

    Fitch reports that January has been a busy month for EMEA CMBS loan maturities, with all but three of the 24 loans from the agency's portfolio that are maturing in 1Q14 falling due this month. The majority of the loans maturing between January and March have Fitch-calculated loan-to-values (LTV) of 80% or above, making refinancing at maturity difficult without sponsor .......

    News Round-up 29 January 2014

  • Trepp invests in solar analysis platform

    Solar energy investment analysis and decision making platform Mercatus has closed its Series A round of financing. Trepp has joined Vision Ridge Partners, Augment Ventures and Shah Capital in investing in the company and Trepp coo Dan Gottlieb will also join Mercatus' board.

    Mercatus allows lenders and capital market investors to harness the strength of its investment analysis and analytics .......

    Job Swaps 29 January 2014

  • Spreads steady as CMBS supply rises

    Generic US CMBS spreads were unchanged yesterday as bid-list volume continued to climb, reaching almost US$246m for the day. Secondary supply came from various vintages, with SCI's PriceABS data capturing tranches from 2005 to 2013.

    Among the 2005-vintage deals, the BAYC 2005-1A A1 bond was out for the bid and talked in the very high-80s. The tranche was .......

    Market Reports 29 January 2014

  • Servicer replacement to spark investor activism?

    Last week saw a first for European CMBS, when Hatfield Philips International was replaced with Mount Street as the primary servicer on all loans in Windermere XIV (see SCI's CMBS loan events database). The move is expected to spark increasing investor activism across the sector.

    The WINDM XIV case marks the first time that an existing primary servicer .......

    News 29 January 2014

  • Change in strategy for INFIN SOPR?

    Following a failure to pay, credit events have been called for the EHE Pool 1A and 2B reference obligations, representing almost 70% of the pool backing the Infinity 2007-1 Soprano CMBS (see SCI's CMBS loan events database). A work-out of the transaction is now expected to be significantly delayed.

    In a typical synthetic CMBS, a credit event has .......

    News 28 January 2014

  • Asian ratings poised for positive performance

    S&P expects collateral performance and structural enhancement to underpin stable to marginally positive ratings performance for Asia-Pacific structured finance securities. However, tranches that have key rating dependencies on transaction counterparties could continue to be affected by the credit conditions that would impact the credit profiles of the counterparties, the agency says.

    The economic outlook is mixed across countries where outstanding .......

    News Round-up 28 January 2014

  • CRE firm names president

    Cornerstone Real Estate Advisers has appointed Scott Brown as president of the firm. He will join next month and take over from David Reilly, who will remain as ceo.

    Brown has 26 years of real estate experience and has been involved in securitisations, REITs and various other investment structures. He joins from CBRE Global Multi Manager, where he was head .......

    Job Swaps 28 January 2014

  • Italian government exposure analysed

    Fitch says that ratings on outstanding Italian CMBS will not be affected by recent legislative changes, which include further termination rights for certain public entity tenants. The agency has identified three CMBS with material exposure to Italian government leases.

    In an attempt to cut rental costs and optimise occupied space related to administrative functions, Law decree No. 151 of 30 .......

    News Round-up 27 January 2014

  • Innkeepers up for sale

    The Chatham/Cerberus joint venture has put the 51-hotel, 6,847-room Innkeepers portfolio up for sale via Eastdil Secured. The asset is being offered unencumbered by management contracts and has a US$950m interest-only loan in place that is assumable, subject to certain conditions.

    The portfolio benefits from US$171m (or approximately US$25,000 per room) in capital expenditures since 2007. Operating performance was strong .......

    News Round-up 27 January 2014

  • Conduit credit quality hits 2005 lows

    US CMBS conduit loan credit quality has decreased to the levels of the late 2005 issuance, requiring more credit enhancement to offset increased credit risk, according to Moody's. The agency says that credit enhancement levels for deals in 1Q14 will be nearly 9% to achieve a Baa3 rating, 300bp higher than the levels necessary for a Baa3 rating in early .......

    News Round-up 24 January 2014

  • CMBS 2.0 prepayments on the rise

    The JPMCC 2011-C5 US$49.7m class A1 notes paid off this month after three loans - the US$26.43m Lehigh Valley Portfolio, US$6.45m Morningstar of Chapel Hill and US$3.55m Morningstar of Virginia Beach - prepaid with yield maintenance. The move is part of a growing trend of CMBS 2.0 loans prepaying with yield maintenance as both commercial real estate prices and Treasury .......

    News 24 January 2014

  • DSCRs under pressure

    Every major CMBS underwriting metric declined in 2013 except for debt service coverage ratio (DSCR), but with interest rates likely to rise over the next two years DSCR will likely decline too, according to Fitch. In turn, the agency is likely to raise credit enhancement levels if higher interest rates push DSCRs down.

    Even if current levels of DSCR are .......

    News Round-up 23 January 2014

  • Loss reimbursements to diverge?

    The recent loss recoupment to the D tranche of CWCI 2006-C1 (SCI 20 January) appears not to have been reflected in the January settlements for the CMBX.3 index, of which the transaction is a constituent. The loss on the AJ tranche resulted in pay-outs on the AJ.3 sub-index, however.

    CMBX documentation allows for a 'write-down reimbursement' payment - made by .......

    News Round-up 23 January 2014
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