Describing it as “not a surprise,” Fink says had that property not been refinanced last month, the percentage payoff would have been “a lot” lower. But due to the large loan size, generally there’s between $1.5 billion and $2.5 billion of loans maturing every month, which helped pay a role in the high percentage for the month.

“This was a $500 million loan, so it’s a huge chunk of the number, so that skews the result from that perspective,” he says. “The positive is that a) it was a large loan and it got done and granted it was in the New York market, but it got paid off, and it got paid off on-time. It is clearly a sign that good properties with the right financial structure should be able to secure the financing they need to continue to pay whatever debts they have and refinance them and move on.”

By loan count, Trepp says 64.9% of the loans paid off. This was up over 13 points from January’s reading of 51.2%. On the basis of the loan count, the 12-month rolling average is now 51.7%.
Prior to 2008, the payoff percentages were typically well north of 70%. However, since the beginning of 2009, there have only been four months where more than half of the balance of the loans reaching their balloon date actually paid off, Trepp says.

But March can be a whole different story, Fink says. “I would be surprised of the one-loan effect,” he adds. “I would not be at all surprised if the percentage went down again. That’s why you keep track of the average.”