NEW YORK CITY-Payoffs are happening. Locally based Trepp reports that the percentage of loans getting paid off by their balloon date was 61.8% last month—the fifth time in six months that the rate has exceeded 60%. But the February numbers are also well ahead of the 12 month average of 49.2%.
What does it all mean? It continues the upward trajectory of the market. “Refinancings continue to happen at dramatically higher level than a year ago,” Manus Clancy, senior managing director of Trepp, tells GlobeSt.com, "and that bodes well for CRE lenders and borrowers.”
“Six months ago, we noted that the payoff rate could move to the upside for the remainder of 2012,” says Clancy. “We mentioned that loans reaching their maturity date would likely be more heavily populated with loans from earlier vintages, and that assets from that time frame were made with lower leverage and more reasonable valuations.” He added that the past six months results have confirmed the trend.
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John Salustri
John Salustri has covered the commercial real estate industry for nearly 25 years. He was the founding editor of GlobeSt.com, and is a four-time recipient of the Excellence in Journalism award from the National Association of Real Estate Editors.
