retrade risk is one of the biggest factors, he says.
“Not all lenders are the same and some are quicker to retrade
From $55 Billion To…..
than others. But some borrowers always seem to get surprised by
this—signing up for the best quote at the beginning of the process
does not ensure you have the best execution of the day. That is the
danger of CMBS—when the market moves suddenly, there is little
protection for the borrower.”
For that reason, Sublett says, most borrowers still prefer to work
with life companies or the agencies. “Only after those are exhausted
as possibilities will they work with CMBS.”
CMBS, though, is clearly doing something right even with these
uncertainties. However, it must be noted that there was a distinct pause in the market when the Federal Reserve announced
earlier this year that it would begin to taper its bond-buying
program at some point in 2013. As of this writing, that has not
When 2013 dawned, experts assumed the year would close out
with some $55 billion in CMBS volume completed, observes
Brian Olasov, managing director with McKenna Long & Aldridge.
Here we are in the third quarter and some $60 billion has been
racked up, and the general consensus has changed to an $80-bil-
lion to $85-billion prediction, he says.
“Obviously CMBS is attractive enough right now to attract $80
billion in financing,” Olasov says.
Much of the year’s activity has been characterized by single
borrower deals, but now as floating-rate deals are becoming
more attractive too, with the steepening of the yield curve.
Also fueling CMBS, Olasov says, is the pullback by the GSEs
this year in multifamily investments.
This March, the Federal Housing Finance Agency dropped a
bombshell on the multifamily industry: it was announced there
Avison Young congratulates
Chip Watson on being
recognized as one of Real Estate
Forum’s 40 Under 40.
Thank you for your
contributions in helping
us become the fastest-growing commercial
real estate services firm
in the world
Chip Watson Principal, Atlanta
Contact us for all of your financing needs.
Regarded as the North American Community Bank
for Hotel Franchisors, Access Point Financial’s
team of experts structure thoughtful, customized
solutions in order to meet their clients’ specific
When Campus Evolutions was unable to close on Freddie Mac
financing for the purchase of a four-property student housing
portfolio earlier this year, it turned to the CMBS market. Within
18 days, SL Capital put together a $33.5-million collateralized
CMBS loan for the $46.5-million purchase. The property shown
at left, at the University of Central Missouri in Warrensburg, is
part of the Campus Core portfolio.