CMBS Loan Pay Offs Down for December

Almost 55% of the loans financed through a commercial mortgage-backed security execution reaching their balloon date were paid off in December, the first time since September that this percentage has been under 60%, according to Trepp.

This is still an improvement over the 12-month moving average of 47%.

This overall improved performance is because these are loans which are from older vintages and thus have more realistic valuations and are more likely to pay off on time than those originated in 2007 or later.

Trepp added, “With new issue CMBS spreads at their tightest levels in four years, and with the Treasury curve near historic lows, more loans should be able to refinance now than at any time since 2008. The vibrant new issue market reinforces that point.”