RCA Insights

Chart: Composition of US Apartment, Hotel Lending

By on June 26th, 2020

In an RCA Insights post earlier this month, Jim Costello described how CMBS distress would be just the “tip of the iceberg” for upcoming loan trouble in the U.S. office, industrial and retail sectors, and indicated that investors should build relationships with other lenders to uncover deals. Readers of RCA Insights asked: what about lending in the apartment and hotel sectors?

Back in 2007 before the Global Financial Crisis hit, the composition of the commercial real estate debt market for all sectors was dominated by CMBS. Fast-forward to 2019, before Covid-19 shuttered the U.S. economy, and the CMBS share of lending was much reduced.

While CMBS still represented the largest slice of hotel lending in 2019, it was a much smaller piece of the pie. As the CMBS share fell back, other lender groups such as banks and investor-driven lenders filled the gap. For the apartment market, government agencies and the banks gained the most ground, while CMBS dropped to less than a 10% share of the market.

===

RCA clients can use the new RCA Surveillance tool to search around a CMBS-linked property to identify recent sales, and potentially troubled and troubled properties and borrowers that may have an impact on the loan. Contact us to learn more about this tool and RCA’s Mortgage Debt Intelligence.

Analysis of the U.S. lender landscape appears in the latest edition of US Capital Trends, released June 24. RCA clients can log in to download their copies of the reports and data files. 

Also on RCA Insights:

CMBS Distress Is Only the Tip of the Iceberg

The US Market for Hotel Properties Is Frozen

This Is What a Distress Cycle Looks Like