LOS ANGELES—It has finally arrived: the final year of CMBS maturities from the previous cycle. It has been a long awaited moment in the capital markets—to see how all of that debt from 2007 will be absorbed. At the start of 2016, another busy year for CMBS maturities, the CMBS market nearly collapsed, leaving many borrowers to wonder if refinancing was plausible. This year, in anticipation of refinancing issues, many lenders have launched bridge platforms to accommodate the maturing debt.
“We are seeing a lot more bridge platforms spring to life from existing lenders that didn't have bridge platforms and from newly formed debt funds that are entering the market,” Shlomi Ronen, a managing principal at Dekel Capital, tells GlobeSt.com. “I think the private financing market it going to inject sufficient liquidity to deal with the CMBS maturity wave that we are expecting this year.”
The bridge lenders are able to fill a void in the market that will allow borrowers to extend their debt. “These new bridge platforms are able to bridge the gap for borrowers that are unable to refinance CMBS debt through another lending source,” says Ronen. “This is a realization that a percentage of the loans that are maturing are not going to be a fit for a direct refinance, and someone is going to have to go in and repurpose or reposition those assets. It makes bridge financing a viable option for those assets.”
While these new platforms have been actively popping up, it may not be necessary. Ronen says that the CMBS market, especially compared to early 2016, is healthy with plenty of capacity for borrowers. Additionally, other lending sources are able to take on that debt as well. “CMBS seems to have plenty of capacity,” he says. “They have figured out the risk retention aspect of the regulations and are proceeding with securitizations.”
LOS ANGELES—It has finally arrived: the final year of CMBS maturities from the previous cycle. It has been a long awaited moment in the capital markets—to see how all of that debt from 2007 will be absorbed. At the start of 2016, another busy year for CMBS maturities, the CMBS market nearly collapsed, leaving many borrowers to wonder if refinancing was plausible. This year, in anticipation of refinancing issues, many lenders have launched bridge platforms to accommodate the maturing debt.
“We are seeing a lot more bridge platforms spring to life from existing lenders that didn't have bridge platforms and from newly formed debt funds that are entering the market,” Shlomi Ronen, a managing principal at Dekel Capital, tells GlobeSt.com. “I think the private financing market it going to inject sufficient liquidity to deal with the CMBS maturity wave that we are expecting this year.”
The bridge lenders are able to fill a void in the market that will allow borrowers to extend their debt. “These new bridge platforms are able to bridge the gap for borrowers that are unable to refinance CMBS debt through another lending source,” says Ronen. “This is a realization that a percentage of the loans that are maturing are not going to be a fit for a direct refinance, and someone is going to have to go in and repurpose or reposition those assets. It makes bridge financing a viable option for those assets.”
While these new platforms have been actively popping up, it may not be necessary. Ronen says that the CMBS market, especially compared to early 2016, is healthy with plenty of capacity for borrowers. Additionally, other lending sources are able to take on that debt as well. “CMBS seems to have plenty of capacity,” he says. “They have figured out the risk retention aspect of the regulations and are proceeding with securitizations.”
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