Total outstanding CMBS dipped by about $3.6 billion in the February remittance period, according to the CMBS credit handbook put out by Barclays Capital. The drivers include amortization, payoffs and liquidation.
Loan payoffs accounted for $2.1 billion of the drop and were led by retiring loans at maturity for 2001 and 2006 vintages.
“A higher balance of payoffs is consistent with our view that the percentage of loans that are able to secure refinancing is growing and stands close to 60% of the overall maturing universe,” said the report, penned by Julia Tcherkassova and Keerthi Raghavan.
Loan purchases over the period — including Prudential’s sale of the splashy Bay Colony Corporate Center to Boston Properties (LBCMT 2007-C3), — were a sign that buyers are seeing value in assuming seller financing. These acquisitions are typically deemed credit-positive and good for cash flow stability, the former because new sponsors are usually stronger since the purchase has to be approved by rating agencies, Barclays said.
The report added that 60-day delinquencies over the period rose to near 9.3% as expected.
Report is attached.