Record-Breaking CMBS Issuance of $85 Bil Predicted

NEW YORK CITY-At the end of the second quarter of 2001, $40.7 billion in commercial mortgage-backed securities had been issued, well above last year’s second quarter of $28 billion and slightly below the record high of $43.4 billion in 1998. CMBS credit spreads tightened by 20 basis points, on average, as investors, seeking higher yields in a weak economy, moved from stocks to bonds, according to the Bear Stearns Real Estate Securities Monitor.

Looking ahead, most analysts are forecasting CMBS issuance will top the 1998 all-time high of $78.4 billion. Bear Stearns has revised its estimate upward from $75 billion to $85 billion. Unsecured debt issues by REITs year-to-date comes in at $4.8 billion compared to only $1.8 billion for the same period in 2000.