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Record-Breaking CMBS Issuance of $85 Bil Predicted

NEW YORK CITY-As of mid June, the value of preferred REIT stock issued during the first half of the year amounted to $850 million, a stunning increase over the $24 million that came to market during the same period in 2000.

By John Howe | Updated on July 16, 2001

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.

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