It's a Seller's Market for CMBS Collateral

BOSTON—CMBS whole loan prices were up nearly 5% in February versus the prior year, according to DebtX, highlighting the favorable seller’s environment for these securities. The reasons for the significant uptick, the company said, included improving loan-to-value ratios and debt service coverage, as well as fairly stable interest rates.

“Based on this data, it is hard to say that things aren’t fundamentally improving,” Managing Director Will Mercer tells GlobeSt.com. It is important to note that this data is not reflective of the pricing of actual CMBS bonds, which could be affected by any number of technical or market issues. Rather, DebtX prices the underlying collateral. For that reason, the data is particularly telling for lenders who might be wondering about the health of their current loan portfolio or thinking about selling some of their loans. Investors or buyers of mortgages would also find the data relevant.