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CMBS has fallen out of popularity in recent years. With an abundance of other capital options, the market share of CMBS debt was only 16% in 2018, compared to 54% in 2007, according to Mark Ritchie, a principal at Newmark Realty Capital. It is a dramatic change, considering the popularity of CMBS debt in the last cycle.

“The drop-off is a result of an abundance of money from other lending sources, the market reacting to those options and past experiences with CMBS,” Ritchie tells GlobeSt.com. “However, if CMBS further deteriorates, undoubtedly all CRE asset classes will be negatively impacted. Most notably, the first problem will be a re-pricing of properties supported by CMBS lending, and then eventually leaking into all CRE asset values. It’s time for the CMBS industry to address the changes required to meet the needs of an ever evolving borrowing community.”

Kelsi Maree Borland

Kelsi Borland is a freelance writer and editor living whose work has appeared in such publications as Travel + Leisure, Angeleno and Riviera Orange County.

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