JPMorgan analysts expect issuance of commercial mortgage-backeds to hit $86 billion during 2014.
In a report released Wednesday, they also said that individual deals should get bigger. Issuance will outstrip run-off as the analysts forecast that net supply would be $5 billion.
“The first positive year since the crisis,” they said.
Compared to corporates, the analysts expected legacy CMBS to outperform, while new deals will underperform investment-grade paper of similar duration.
“Next year, CMBS credit performance will be similar to that of 2013, as new delinquencies trend downward [and] portfolio liquidations increase,” they said.
The forecast for fresh supply of agency CMBS was $55 billion. The supply-demand dynamic in that asset class will hinge on the outlook for the GSEs and how much they pull back in the multifamily market, according to the analysts.