Page 58

CRE Finance World, Summer 2012

U.S. CMBS Balloon Wave Table 3 For now, stagnant property prices persist and underwriting remains U.S. CMBS Deals with Largest Exposure to Balloons conservative, so CMBS investors have to contend with immediate financing and property performance concerns as some borrowers may find it difficult to pay off their loans. To analyze potential cash flow deficiency or maturity extensions, Bloomberg-powered models allow investors to simulate these various outcomes and easily analyze the impact across bonds in a CMBS deal, to identify senior-most bonds affected by credit and extension sensitive scenarios. 1 “Ten Percent of Non-Bank Commercial/Multifamily Debt Will Mature in 2012, Down From 2011”, Mortgage Bankers Association, February 6, 2012. 2 “Mortgage Bankers Roundtable, Part II: Taking Stock of Today’s Financing Conditions”, Commercial Property Executive, March 2, 2012. 3 “CMBS: Full Loan Payoffs to Fall in 2012”, S&P’s Structured Finance Source: Bloomberg, BLNR<GO> as of April 24, 2012 Research Update, February 8, 2012. *2012 Loans Due includes loans with final optional extensions expiring 8 months or less 4 “ULI Real Estate Consensus Forecast”, Urban Land Institute, March CMBS’s future remains somewhat uncertain and has not gained 28, 2012. much momentum as a source for financing, with some predicting flat issuance compared to 2011. Recently published market surveys, 5 Results of the CPE 100 Quarterly Sentiment Survey, http://www.cpex- from various industry groups, report CMBS making a comeback — ecutive.com/business-management/results-of-the-cpe-100-quarterly- in 2 to 3 years. The Urban of Land Institute Real Estate Consensus sentiment-survey/ (April 3, 2012). Forecast survey respondents expect CMBS to rebound, doubling in the next three years, from $40 billion to $75 billion in 20144. The Commercial Property Executive 100 Quarterly Sentiment Survey reported 35% of respondents doubt CMBS will return as a major source of financing, and 40% felt it would be another 3 or more years before CMBS can adequately fill the financing gap.5 CRE Finance World Summer 2012 56


CRE Finance World, Summer 2012
To see the actual publication please follow the link above