Monday, December 21, 2009
A Guide to Maturing Loans
By Scott Barrie, Managing Director
Investcap Advisors LLC
Below is a very informative article for those seeking to understand the relationship between Master, Special Servicers and Borrowers as it relates to maturing CMBS loans.
A Guide to Maturing CMBS Loans
CMBS Market Commentary
Investcap Advisor LLC
The market is winding down for the year, and uncertainty persists as to whether the dark clouds on the horizon will bring more stormy weather or move away from us and leave a relative calm in the our market. In the opinion of this market participant, the storm will pass over us and bring rain at least for the next three years. Sorry I am not able to spread more holiday cheer. The major headwind that no liquidity facility or amount of optimism will be able to overcome is the $1 trillion in commercial real estate financing that is coming due over the next three years. True, fresh equity will enter this space, but only under terms that make it senior to the existing equity and perhaps after obtaining a partial loan write-down from existing lenders. Market forces will exert pressure toward the realization of these losses. Some projects are so far under water that no realistic
level of recovery will bounce them back to their original basis.
Bargain hunters will have plenty to choose from over this time period.
The market is winding down for the year, and uncertainty persists as to whether the dark clouds on the horizon will bring more stormy weather or move away from us and leave a relative calm in the our market. In the opinion of this market participant, the storm will pass over us and bring rain at least for the next three years. Sorry I am not able to spread more holiday cheer. The major headwind that no liquidity facility or amount of optimism will be able to overcome is the $1 trillion in commercial real estate financing that is coming due over the next three years. True, fresh equity will enter this space, but only under terms that make it senior to the existing equity and perhaps after obtaining a partial loan write-down from existing lenders. Market forces will exert pressure toward the realization of these losses. Some projects are so far under water that no realistic
level of recovery will bounce them back to their original basis.
Bargain hunters will have plenty to choose from over this time period.
CMBS Marketplace Update
Investcap Advisors LLC
The market for CMBS and other debt instruments appears to be winding down as we approach the end of the year. The fourth quarter witnessed to resurgence of the new issue market but it is certain the market will not spring back to its former self anytime soon. It feels like the broker/dealer community remains long positions in CMBS, but the general anticipation is that the market is heading higher next year.
There are good reasons to believe this is so, but the headwinds in the property markets for commercial real estate will remain strong. Activity should be muted this week, except perhaps for the occasional seller looking to square away positions for year end.
The market for CMBS and other debt instruments appears to be winding down as we approach the end of the year. The fourth quarter witnessed to resurgence of the new issue market but it is certain the market will not spring back to its former self anytime soon. It feels like the broker/dealer community remains long positions in CMBS, but the general anticipation is that the market is heading higher next year.
There are good reasons to believe this is so, but the headwinds in the property markets for commercial real estate will remain strong. Activity should be muted this week, except perhaps for the occasional seller looking to square away positions for year end.
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