Opinion is split over what the future holds for CMBS spreads, but the long and short of it is that 50 basis points over swaps for triple-A tranches looks to be about the cap. Spreads are currently at 47 basis points on new, par-priced paper, but there is some speculation that a late-quarter deluge of supply will hamper any hopes of spread tightening.

Domestic supply looks to be about another $15 billion in the next two months, adding to the over $40 billion already seen this year. That is what happened last year and is a solid bet for this year as well. It would seem, however, that suggestion is at least partially mitigated by the overall financial and economic picture.

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