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CMBS Loan Prices Rise in November

JAN 7, 2013 12:15pm ET
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Prices for the commercial real estate loans that comprise mortgage-backed securities rose in November according to DebtX, but prices on nonperforming loans traded on its platform declined by 70 basis points.

The estimated price of whole loans used to secure CMBS was 89.4% for November, up 50 basis points from October’s 88.9%. One year prior, loan values were at 85.2%.

Will Mercer, DebtX managing director, said, “Most CRE loan prices rose in November due to the strengthening CRE capital markets and the downward shift in the Treasury yield curve. All loan categories show significant improvement year-over-year, but recent trades show a slight divergence between performing and nonperforming loans.”

Nonperforming loans traded on DebtX saw their weighted average monthly price fall to 51.2% in November, compared with 51.9% in October. But when compared to November 2011, the price increased from just 40.7%.

Prices for impaired loans traded on the exchange increased 90 basis points from October, to 80.3%. In November 2011, these loans were priced at 71.5%.

Previously, Fitch Ratings predicted an estimated $50 billion in CMBS issuance in 2013, up from a predicted $45 billion in 2012.

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