Equity Market Turmoil May Fail to Stifle CMBS Recovery
Retail Traffic reports: At the start of the year, commercial real estate debt analysts indicated that CMBS activity had nowhere to go but up. And up it did, with Retail Traffic Editor-in-Chief David Bodamer describing the formerly down-and-out securitized debt vehicle as “…having a pretty good year in 2011.” With more than $20.0 billion in new issues through July, forecasts had new CMBS reaching up to $50.0 billion by year-end.
The past month’s macroeconomic turmoil has put a dent in that bullish outlook. Spreads have widened as a result of that trouble to their widest level since last Fall, leading originators astray as they attempt to price the third quarter’s issuances. If things calm down on Wall Street, however, the year may still finish off strong. Mr Bodamer cited Real Estate Analytics Managing Director Dan Fasulo’s expert opinion on the matter: “I’m pretty sure CMBS is going to take off the rest of August and come back after Labor Day…But CMBS as an asset class still remains attractive in my mind on a risk adjusted basis compared with a lot of other things out there.”
More than anything, the article in Retail Traffic emphasized that solid securitization packages are what will allow the CMBS market’s recovery to continue. Quoting David Lynn, managing director at New York-based Clarion Partners, Mr Bodamer concluded with “All things considered CMBS looks relatively good, with the caveat being it has to be simpler and well underwritten.”
View the full article on Retail Traffic: Equity Market Turmoil May Fail to Stifle CMBS Recovery
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Posted by: Nina Turner