Kroll Bond Rating Agency assigned preliminary ratings to Freddie Mac's $1.37 billion, multi-borrower CMBS called FREMF 2012-KF01.
The transaction is collateralized by 80 floating-rate multifamily mortgage loans and is the GSE's capital markets execution (CME) program’s inaugural floating-rate transaction.
The underlying properties are located in 21 states, with the two largest concentrations in Texas (25.7%) and California (17.9%), and over half of the pool (60.1%) is located in primary markets.
Multifamily Stands Out
A Sept. 25, Morningstar report on commercial property fundamentals said that multifamily CMBS deals standout amid a "slowly" recovering CMBS sector. The report said that multifamily deals can potentially reach recovery much faster than other structures.
The overall rate of delinquency in the multifamily sector has retreated by 3.5 percentage points since peaking early last year.
"This comes as little surprise, given that potential homebuyers, uncertain of the direction of single-family house prices, have provided ample demand for existing multifamily space," said analysts in the report.
Morningstar's report showed that CMBS issuance this year is expected to make a strong finish in the 4Q12. The numbers will likely be boosted by multifamily deals.
"We do expect further issuance by way of more Freddie Mac K deals, placing an additional $8 billion of agency issuance in the market," analysts said in the report.