CMBS loan spreads - Liberty Realty Capital Group

CMBS Lenders Scramble to Comply With Looming ‘Risk Retention’ Rules

June 24, 2016 by Randybaconin Commercial Mortgage Lending, Real EstateLeave a Comment

Analysts Say New Round of Financial Oversight Rules Governing Loan Risk Could Affect Lending Rates, CMBS Volumes

New financial oversight regulations set to go into effect later this year will require lenders originating CMBS loans to include “skin in the game” by retaining a 5% slice of each CMBS deal for five years.

The new rules going into effect Dec. 24 are raising concerns in a CMBS market already reeling from a year-to-date 50% decline in overall issuance from last year, even as spreads have tightened significantly from earlier in 2016. So far this year, CMBS accounts for only 7% of the overall CRE lending market, down from 17% in 2015. At one point in 2006, CMBS accounted for nearly 50% of total CRE lending.

View entire article at Costar.com.

Find out more about our lending programs or contact Liberty to discuss an opportunity.

CMBS market steady despite widening spreads

October 15, 2015 by Randybaconin Commercial Mortgage LendingLeave a Comment

Despite concern from some – including the Federal Reserve – about widening spreads on investment-grade commercial mortgage-backed securities, metrics on CMBS issuances and falling delinquencies indicate a fairly sunny outlook.

In minutes detailing the Federal Reserve’s meeting last month – in which the Fed decided it would maintain interest rates near zero – the central bank noted that spreads on CMBS “widened noticeably in August, reportedly a result of heavy issuance as well as the increased volatility in broader financial markets.”

But analysts have pointed to metrics indicating such conditions as more of a temporary blip than a sign of a more pronounced slowdown in the controversial market.

“There has been a widening of spreads,” Sean Barrie of CMBS analytics firm Trepp told The Real Deal, citing “a lot of deals stacking the opposite ends of the spectrum” in terms of loan-to-value ratio. Barrie noted, however, that so far October has “seen spreads stay even keel,” which he characterized as a “good sign.”

– See more at: http://therealdeal.com/blog/2015/10/14/cmbs-market-steady-despite-widening-spreads/#sthash.wg7NTQOw.dpuf

Find out more about Liberty at our Youtube page.

To discuss commercial mortgage financing needs contact Liberty here

CMBS Lenders Jack Up Loan Spreads; Others Follow Suit

September 11, 2015 by Randybaconin Commercial Mortgage LendingLeave a Comment

Commercial Real Estate Direct Staff Report

Lenders in recent weeks have responded to the volatility rocking the CMBS market by increasing the premiums, or spreads, they use to determine their loan rates.

Their loan spreads are now 235-250 basis points more than swaps, up from 175-200 bps two months ago. But because Treasury rates, from which swap rates are derived, have declined since July, the overall rates that borrowers are seeing haven’t increased much.

While CMBS lenders have been most impacted – spreads for benchmark CMBS are now some 25 bps wider than they were two months ago, and for lower-rated classes, spreads are 75 bps wider – other lenders are following suit.

CMBS lenders are now quoting rates of 4.5 percent to 4.75 percent. While those are still historically low levels, they’re up from the 4.15-4.3 percent rates that were commonly seen earlier in the year.

Other lenders, including life insurance companies, banks and the housing-finance

agencies, haven’t widened their spreads as much as CMBS lenders – they’ve widened them by at least 20 bps – so they’re evidently not taking advantage of volatile market conditions to pick up market share. That’s in part because they might not be able to. Still, they’re hotly pursuing low-leverage loans against favored property types in strong locations.

Read this and more articles at Commercial Real Estate Direct

Find out more about Liberty at our Youtube page

To discuss your funding needs contact us.