Why is CMBS Issuance Still Riding the Brakes?

S&P headquarters in Lower Manhattan

NEW YORK CITY—Notwithstanding a sluggish start to 2017, the year’s first half nonetheless saw issuance of $34.4 billion in private-label CMBS, Kroll Bond Rating Agency reported earlier this month. That’s a 27.8% increase from the year-ago period, and more than half of the year-to-date dollar volume was generated in May and June alone, according to KBRA.

Yet despite what S&P Global Ratings calls “active demand for CMBS” in a new report on structured finance, the report also contains the ratings agency’s prediction that the year will finish with total volume basically flat from 2016. What’s holding the industry back from breaking through the $100-billion barrier that has eluded it in recent years?