CRE

For banks with assets between $10 billion and $100 billion, the average exposure is 165% of capital.

But deal sponsors are primarily restricting property assets to the lower risk multifamily and office buildings that lenders are more confident will weather the economic strains brought by the coronavirus pandemic.

Sellers are currently willing to concede discounts of around 5%, while bidders are hoping for about 20% off pre-pandemic prices. That estimated gap, which is likely wider in specific cases, has put a freeze on deals.

PACE sponsors are raising capital and promoting plans to retroactively fund stalled CRE projects amid the COVID-19 outbreak, giving a potential boost to ABS activity in the space.

Goldman Sachs and Morgan Stanley are backing the first commercial mortgage-backed securities activity in two months, through two deals that exclude hotel or department store retail assets that are most exposed to pandemic-related stresses.

Delinquencies in U.S. commercial mortgage-backed securities jumped in April, with the economy battered by the coronavirus pandemic.

Mounting economic fallout from the pandemic is fueling apartment landlords' concerns that more tenants will struggle to make their rent payments, even after most managed to come up with the money for April.

The delinquency rate for commercial mortgage-backed securities ended 2019 at its lowest point in nearly 11 years, aided by increased issuance and the resolution of legacy transactions, Fitch Ratings said.

The board- and management-level handing of CRE concentration was the chief concern of FDIC examiners, making up more than 56% of all the supervisory recommendations regulators made in the two-year period.

JPMorgan Chase & Co.’s asset management arm is extending a push into the $787 billion private credit market as cash pours into the asset class from yield-hungry investors.