NEW YORK CITY—Although Fitch Ratings and Trepp LLC both have reported upticks in the delinquency rate for CMBS, both organizations also have some good, if tempered, news to impart about securitized commercial mortgages. Trepp says that substantial progress has been made in scaling the “wall of maturities” down to size, while Fitch cites generally strong property cash flows for so-called CMBS 2.0 deals.
From the beginning of 2015 through the third quarter of this year, almost $190 billion in US CMBS loans have been paid off or liquidated, says Trepp. The tally represents a sizable portion of the $300-billion wall of maturities, comprised of CMBS loans with final payment dates between '15 and 2018.
“Strong market fundamentals coupled with recent increases in property income levels have allowed borrowers to seize available capital and refinance loans prior to maturity,” says Manus Clancy, senior managing director at Trepp. “However, challenges may arise in 2017 as many loans that mature next year are over-leveraged. With rising Treasury rates and a Fed-imposed rate hike possibly impending, borrowers might find it harder to land refinancing.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
