Morningstar's headquarters in Chicago
CHICAGO–The commercial mortgage-backed securities market is tracking better year to date compared to the same period the previous year, according to stats and an analysis by Morningstar in its Q3 Market Outlook.
CMBS issuance started strong this year and Morningstar expects this momentum to continue until at least the third quarter of 2018. Citing figures by Trepp, it reports that by the end of June, new issuance totaled $44.3 billion, compared to the $34.45 billion issued in the same period last year.
Driving the activity has been issuance volume for single-asset, single-borrower CMBS deals, which has been fueled by deals on trophy skyscrapers in major cities. According to Trepp, SASB issuance will total $18.06 billion by the end of the second quarter versus $11.88 billion from the same period a year ago. So far office loans have made up the largest portion of total issuance with $4.48 billion or 29.1% of this year's volume.
The market should remain stable for the remainder of the year, Morningstar says. It writes:
While there may be some pockets of risk, continued economic growth should buoy demand across most sectors. The industrial sector may be the prime beneficiary and the multifamily, hospitality and office sectors may slow after several years of gains and more new construction. Retail could be at higher risk, as the industry consolidates and attempts to cope with the increased competition from online retailers.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- 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
*May exclude premium content© 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.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
