Mark Halloran
Director, GRS | Corteq
(732) 450-8960
[email protected]
There is more good news coming out of the CMBS realm of commercial real estate lending, showing continued faith in the industry.
For starters, CMBS issuances came in at $19.4 billion during the first quarter, according to data from Trepp, which was a 55 percent increase from the same year-ago period. The biggest lender in the quarter was JPMorgan, which accounted for $3.4 billion over five deals, or about 18 percent of the total market share. It was followed by Deutsche Bank, which issued just over $2.7 billion over three deals and made up 14.1 percent.
Meanwhile, Deutsche and Citigroup were tops in the total number of loans, with 58, followed by JPMorgan’s 54. Trepp points out that one of the reasons for the major increase over the last year was because of hesitance in the market during the first quarter of 2017 and a new comfort with an increasing interest rate environment that makes investors want to lock in rates.
On the delinquency side, meanwhile, Trepp reported that they are the lowest level in two years, specifically since May 2016, for the CMBS sector. Much of this has to do with, it said, the issuance of replacement loans and the resolution of many that were having issues.
In April specifically, the rate was 116 basis points lower than the same year-ago period, hitting 4.15 percent. Retail was the sector with the highest rate, at 5.97 percent, followed by office, at 5.57 percent. Multifamily was the lowest, at 2.26 percent. Every major commercial real estate sector saw a 12-month improvement, with industrial seeing the biggest turnaround, from 7.15 percent, to 4.53 percent.
The largest non-performing loan recorded by the firm was just under $99.4 million for a portfolio of Rite Aid stores in numerous locations. Followed by that was the foreclosed Regions Harbert Plaza, in Birmingham, Ala., at $81.4 million, which reportedly has significant vacancy issues.
Looking at the future, a recent Urban Land Institute forecast could mean more good news ahead for CMBS. ULI says that CMBS issuances are expected to hit $90 billion this year as well as in 2019, down slightly from last year’s $95.3 billion. Meanwhile, overall transactions are projected to come in at $450 billion for all of 2018. Deals topping $10 million a transaction each hit $375.6 billion in 2017, according to Real Capital Analytics data.
About GRS Group:
GRS Group is a leading provider of commercial real estate (“CRE”) services worldwide. With offices across the United States, Europe, and affiliates around the globe, GRS Group provides local market knowledge with a global perspective for institutional real estate investors, occupiers and lenders worldwide. The GRS Group team has evaluated and advised on over $1 trillion in CRE transactions.