There has been an increase of loans secured by assets such as manufactured housing properties and self-storage properties bundled into commercial mortgage-backed securities, says Fitch Ratings.
The majority of loans making up CMBS continue to be secured by retail, office, multifamily and industrial properties, what Fitch says are the traditional collateral types.
But manufactured housing communities included in Fitch-rated deals have grown to 6% as of September from being in less than 1% of securitizations in 2010. Self-storage properties are in 4% of the securitizations year-to-date.
Hotels and other lodging properties, which Fitch considers as part of the traditional types, are 15% of securitization collateral year-to-date, from less than 5% in 2010.
The percentage of multifamily loans going into CMBS has grown as well as conduit loan originators have picked up a lot of the slack resulting from the government-sponsored enterprises cap on multifamily lending, says Tim Koltermann, who heads up
The weighted average concentration of multifamily properties in CMBS has gone to around 15% from 6% to 7% this past summer, he says.
Walker & Dunlop Inc. has just launched that lending platform, with Fortress Investment Group as partner. Until now, it has been originating conduit loans for other securitizers. Now it will doing conduit loans for its own securitizations.
The conduit marketplace is a place the company can use its existing commercial mortgage origination operation and use the same practices and policies in the CMBS environment. It seeks to satisfy demand from multifamily borrowers looking for things than they can get beyond an agency loan execution, he says.
Conduit originations are also more sensitive to interest rate cycles. In rising rate environments, borrowers become “interest rate traders,” he says. The spike which started in the spring also slowed down agency lending as well as life insurer lending.
Since mid-July, the CMBS spread environment has been “pretty positive” with the spreads narrowing from 125 basis points to one recent deal with a spread of 93 bps.
Like on the residential side, borrowers are more interested in their rate and the coupon environment right now is more attractive than it has been over the last 10 to 12 years, he feels.
