Short-term floating-rate mortgages in CMBS and mortgages held by credit companies, warehouse facilities and other investors are more likely to mature in 2009 and 2010 than are fixed-rate CMBS mortgages, mortgages held by life insurance companies or multifamily mortgages held or guaranteed by Fannie Mae, Freddie Mac or FHA. Approximately $120 billion of non-bank commercial/multifamily mortgages are scheduled to mature 2010.
"Substantial concerns have been raised about the volume of mortgages maturing in the face of the current credit crunch," said Jamie Woodwell, MBA's VP of Commercial Real Estate Research. "This study shows that while the dollar volume of maturing non-bank mortgages represents only one-tenth of the total outstanding balance, it is not evenly spread across investor and lender groups. While some parts of that system--such as floating-rate CMBS and credit companies, warehouse facilities and other investors--face a significant volume of near-term loan maturities, others--including fixed-rate conduit CMBS, life insurance companies, Fannie Mae, Freddie Mac and FHA--do not."
Across all these investor groups, commercial/multifamily lenders and servicers have a wide variety of tools to help them deal with maturing mortgages, added Woodwell, "which should mitigate--but not eliminate--the impact of maturities in 2009." He continued that "To the degree mortgages are extended into out years, however, there is an increased consequence should the markets not be functioning in 2010, 2011 or beyond."
MBA's survey on commercial/multifamily loan maturities collected information on the maturity dates of more than $1.7 trillion in outstanding mortgages, including $1.55 trillion of non-bank commercial/multifamily holdings. Investor groups' maturity schedules are generally designed to their match liabilities, and most investor groups have considerable discretion in how they deal with loans that may not be able to immediately refinance at maturity.
Of the total non-bank holdings of commercial/multifamily mortgages coming due in 2009, 52.8% is in CMBS, CDOs or other ABS, and an additional 33.6% is held by credit companies, warehouse facilities or other investors. Only 9.8% of the non-bank mortgages maturing in 2009 are held by life insurance companies, and 3.8% are held or guaranteed by Fannie Mae, Freddie Mac or FHA.
Even within an individual investor group there are significant variations. According to data from RBS Greenwich Capital, $31 billion of the current balance of CMBS loans maturing in 2009 is in floating rate loans. These floating-rate loans tend to have extension options built into them, and according to RBS, only $1.9 billion of the floating rate loans maturing in 2009 have exhausted these options. An additional $19 billion of the balance is fixed-rate loans in conduit/fusion CMBS deals. The CMBS, CDO and other ABS loans categorized in the MBA report also includes B-notes, privately-issued CMBS, mezzanine and other loans that are related to the CMBS market but may not be a part of a publicly issued commercial mortgage-backed security.
Continue Reading for Free
Register and gain access to:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
