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Morningstar: CMBS Payoff Rate Jumps– Brian Olasov Quoted in MBA Newslink

Real Estate   |   March 2, 2017

Carlton Fields Executive Director of Financial Services Consulting, Brian Olasov, was quoted in the MBA Newslink article, “Morningstar: CMBS Payoff Rate Jumps.” The article discusses the increase in the on-time paying rate for maturing loans from late 2016 to early 2017.

Olasov was shared:

The surprisingly high refinancing success was a "monthly theme" lately. If you go back a year or so, the analysts' consensus was for a much lower payoff rate from 2016 maturities. The reason given was too much debt and too little debt yield. But here's where the prediction may continue to break down: the majority of these loans are not rolling back into CMBS.

 

All CMBS servicers have maturity-default watch lists and they have all observed low debt yields and high loan-to-values that should be prohibitive to refinancing absent a debt re-sizing. But still they've paid off at 80 percent-plus levels. Where's the payoff wire coming from? Frequently from some large community or small regional bank with a different--and more permissive--credit box. CMBS may no longer be the so-called “lender of last resort.” If banks' demand for commercial real estate continues to grow, the ‘wave of maturities' may be more of a swell at low tide

READ the article.

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