CMBS investors should brace for one of the largest note auctions in mid-May, according to a report from Barclays Capital.
The bank said that based on information from one of the biggest providers of auction services,
auction.com, buyers in the sector should expect one of the largest number of notes offered for sale.
According to Barclays, the auction comprises two parts, which are a note sale that makes up 64 assets and an REO sale that comprises nine assets.
Barclays looked at the offering versus their CMBS database to project the potential deal level implications.
According to analysts, there are some factors that make this auction unique, including the assets being selected based on their location — Las Vegas and close by areas — and not their association with any one particular servicer. The auction also comprises assets from different property types such as 10 multifamily properties, 25 retail assets, 17 offices, 13 industrial properties and even land.
Barclays analysts said that even though they are able to link most of the auctioned assets to loans in CMBS deals — 60 out of 73 assets — there are still 13 that seem not to be related to any CMBS offering. This makes this auction a mixture in terms of structural (securitized/non-securitized) standpoint. The firm noted that all nine of the REO assets were securitized while there are only a few note sale candidates that seem to be nonsecuritized.
Additionally, Barclays analysts had mentioned that all of the securitized assets were in the past transferred to special servicing, residing mainly with the LNR and C-III servicing portfolios.