The outlook for commercial real estate (CRE) loans backing CMBS continues to improve becuase of increased activity in the CMBS new issue market and strong demand for distressed CRE loans in the secondary market, according to DebtX.
Despite weak CRE fundamentals and increasing levels of delinquencies and defaults, 90% of CMBS loans are still performing, said DebtX CEO Kingsley Greenland.
The aggregate value of CRE loans priced by the Boston-based company backing CMBS increased to 79.4% as of July 30 up from 77.4% at June 30 and 71.1% a year ago.
"Investors have become more comfortable that loan valuations have stabilized and are looking to achieve better risk-adjusted yields," Greenland said.
In July, DebtX priced 57,801 CRE loans with a $679.5 billion aggregate principal balance. These loans, which back 623 U.S. CMBS trusts, each received a DXMark, a price based on loan sales executed at the firm.
DebtX is a full-service loan sale advisor for commercial debt.