News
CMBS COMEBACK
June 14, 2011
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| Every great beach trip has sandcastles, swimming, and ... mortgage-backed securities? No wonder NorthMarq's Bill Libercci arranged a $19M CMBS first mortgage for White Marlin Mall in Ocean City late least week. Goldman Sachs originated the mortgage, and Bill represented borrower Greenberg Gibbons (JVing with Prudential). Lenders usually avoid seasonal locations like Ocean City, he says, but strong anchors and Greenberg Gibbons' solid reputation convinced Goldman the 197k SF mall was worth it. CMBS underwriting has changed, Bill tells us. ?Lenders reinvented themselves. Back in '07, loans were too aggressive, but the recession made everyone update their internal processes.? Now, there's more due diligence and attention to legal protections. And the market's responding: He says JP Morgan sold a CMBS pool for $716.3M last week, the largest conduit deal of its kind in nearly two years (according to Reuters). |
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| Tighter underwriting standards are only one factor fueling the CMBS surge. Bill says investors want direct access to CRE as an asset class, so they're buying REIT stocks and investing in mortgage-backed securities. ?Investors are starting to view real estate as an alternative to traditional fixed-rate assets like corporate bonds,? he says, adding that CRE-backed financial products can generate higher returns than traditional investments. |
