With CMBS as surprisingly active as it has been since the start of the year, it should come as no surprise that participants of ASF’s 2013 conference were growing more bullish about the sector’s prospects for the entire year.
Speaking on a panel, Richard Hill, director of CMBS strategy at RBS Securities, said given the roughly $8 billion in issuance so far in 2013 a full year volume of $80 billion could be feasible.
“There’s a pipeline that we know of going through the spring,” said Kenneth Cheng, managing director of CMBS new issuance ratings at Morningstar Credit Ratings. He said that among the mix of looming deals are fixed-rate conduit transactions, Freddie Mac K deals in the multifamily sector, and single-loan CMBS. His agency knew of a number of deals in the single-loan category that are in the pipeline, Cheng added.
ASR recently ran a feature on the return of the large-loan CMBS sector.
Hill noted that CMBS conduits have been particularly active recently as insurance companies have proven weaker competition for financing loans. As interest rates have fallen to historic lows and insurance companies have floors on the yield they can offer, conduits have been able to offer better terms for originating and refinancing commercial loans. This is a remarkable shift from a year ago, when life insurance companies were making major inroads into the sector, displacing other sources of commercial real estate financing.