Issuance of commercial mortgage-backed securities continues to grow, with volume expected to reach $60 billion to $80 billion this year, according to Trepp. Retail commercial mortgage-backed securities are making up about 34% of overall issuance, less than in 2010 but much higher than in the pre-recession days. There are a number of reasons CMBS is growing, including the low interest rate environment and the need for capital in the industry.
There have been $1.25 billion worth of commercial mortgage backed securities sold this week, according to sources. Riskier loans are being included in the securities, but these more lax underwriting practices are not dissuading investors.
The delinquent unpaid balance for commercial mortgage-backed securities increased by $387.9 million in July, compared with an average growth rate of slightly more than $3 billion a month during the first half of the year, according to Realpoint. It projects the delinquency percentage will grow 9% to 11% during the rest of the year.
JPMorgan Chase is readying a $484.6 million commercial mortgage-backed security backed by assets from Centro Properties Group, according to Realpoint. The single loan is collateralized by 72 retail properties in 20 states.