CMBS Issuances Are Up 23%

NEW YORK CITY-”This year’s tremendous growth in the CMBS market is no surprise,” said Jim Duca, a Moody’s managing director, during Moody’s Sixth Annual CMBS Conference. To date there has been $65 billion in CMBS issuance, up 23% over 2003 and there’s another $22 billion in the pipeline, Duca said. Fusion deals account for nearly 80% of the transactions.

Moody’s Red-Yellow-Green report is a quarterly update on the well-being of commercial real estate markets that support commercial mortgage backed securities. Cities that had green scores in multiple categories are New York, Orange County, CA; Richmond, CA; Riverside, CA; San Antonio, TX; and Ventura County, CA.

According to Moody’s, the CBD office sector nationally can best be described as stable. Absorption is up slightly from last quarter, to +0.6% from +0.3%. The supply pipeline remains a non-threat to most markets–a welcome contrast from the last real estate cycle. Baltimore is also expected to see more robust demand growth in the next year than was expected last quarter. Washington, DC, with a vacancy rate of 7.5%, is the lowest of any of the 46 markets as well as one of only four cities with single-digit vacancy rates. The others are New York City at 8.6%, Charlotte, NC at 9.2%, and Ft. Worth at 9.4%.