CMBS Getting Back to its Old Tricks
Pensions & Investments Online reports: Pensions & Investment Online recently stated in an article on the cautious return of the CMBS debt market that, “Following the recession, only the best properties are getting loans, and buyers are looking to the CMBS market to provide the debt for less-than-perfect real estate. Competition is already stiff, which is forcing CMBS lenders to loosen the tougher, post-crisis requirements they adopted.”
The article pointed out that, despite being one of the largest harbingers of the most recent financial crisis that saw commercial real estate sales slow to almost a standstill, CMBS markets have undergone little to no reform over the past two years. Citing the recent report put out by Real Capital Analytics in conjunction with Deloitte and Real Estate Research Group entitled "Expectations & Market Realities in Real Estate 2011: Balancing Risk and Return in an Era of Uncertainty," Pensions & Investments Online reiterated that as more CMBS players reopen their shops, “Real Estate investment managers expect CMBS requirements to get even looser.” Already, 2010 CMBS issuance increased more than ten times the amount brought to market in 2009.
Another worry expressed about the newest issues of CMBS is that they are being treated fundamentally different by investors this time around. Pensions & Investments Online quoted John Dunlevy of PineBridge Investments who stated that, “…returns in the CMBS market are becoming more volatile. Traditionally, CMBS is correlated with the stock market, which dropped recently. And this time around, CMBS performance also is moving in lockstep with high-yield bonds.”
View the full article on Pensions & Investments Online: CMBS Getting Back to its Old Tricks
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Posted by: Nina Turner