Deutsche Bank is marketing its $941 million CMBS conduit deal, which according to market reports, looks set to be followed by more issuers looking to tap the market.
According to Commercial Real Estate Direct, along with this latest deal, three other conduit deals are being prepared and are slated to transact before quarters end.
A Nomura Securities report indicated that Morgan Stanley and Bank of America are planning to launch a $1.2 billion conduit CMBS deal called MSC 2012-C4 over the next few weeks
“After the European debt crisis and US government bonds gave us a rocky ride in 2011, commercial real estate is back in the saddle for 2012.” John Levy, founder of John B. Levy & Co., said in a podcast this week. “The conduit business gives us a perfect indication of what we can expect."
He explained that first of all, rates are cheaper. Ten-year fixed-rate money is 5% or less, which is 100 basis points better than what it was this past fall. Additionally, Levy stated that second- and third-tier cities are now in the mix. Deal-making has moved from cities like Washington, New York, and Chicago to a broader array of markets, including Albuquerque and Amarillo as well as Nashville and Richmond.
The privately placed Deutsche Bank conduit is marketing the largest piece of its transaction with an initial guidance of 115 basis points over interest-rate swap benchmark, according to a Bloomberg report.