A rated small-balance commercial mortgage-backed securities deal appears to be the first seen in some time.
“I don’t know how long it’s been since a small balance [rated] commercial mortgage securitization happened, but it seems like it’s been a couple of years,” said Kevin Mammoser, senior vice president-CMBS and one of the analysts at DBRS who worked on a presale report for the deal, Waterfall Victoria Mortgage Trust 2011-SBC2.
He told this publication that, to his knowledge, there had been at press time no other rated deals of this type seen in the CMBS market. But “some of this stuff can bounce between CMBS and ABS people, so there could be other deals that maybe aren’t being rated but are being sold,” Mammoser noted.
The roughly $82 million rated portion of the Waterfall deal, which is backed by performing first mortgages with an average 33 months of seasoning, could be another sign of recovery in the rebounding CMBS market that has picked up in activity over the past seven or eight months. But it also could be “just the availability of loans like this and a seller that is able to sell them,” he said.
Greystone Bank originated or purchased almost 95% of the loans in the deal, which overall have an average loan size of a little over $558,000. Lehman Brothers Bank FSB originated the rest of the loans.
Almost 88% of the loans are located in New York or California markets and primarily located in mature neighborhoods with high barrier to entry and limited land available for development. More than 80% of the loans in the pool have adjustable rates. Multifamily and mixed-use properties with multifamily above a storefront located in the New York City, Los Angeles or San Francisco metropolitan statistical areas secure the majority of the loans.
