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CMBS Issuance Doubles in the Second Quarter, Leading to More Positive Outlook

Market insiders now predict that issuance for the whole of 2017 will surpass 2016’s modest level of $69.3 billion.

U.S. CMBS issuance reached $21.2 billion in the second quarter of 2017, according to research firm Trepp LLC—more than doubling the volume achieved in the first quarter of the year.

Year-to-date through August, CMBS issuance has totaled 55.4 billion—up 34.4 percent from the same period in 2016, according to data tracked by Commercial Mortgage Alert, an industry newsletter.

The Mortgage Bankers Association’s (MBA’s) Commercial/Multifamily Originations Index, which uses average quarterly origination volume in 2001 as 100, reported that CMBS origination volume reached 153 in the second quarter, rising 117 percent from the first quarter and 168 percent year-over-year.

A combination of factors, including tighter bond spreads, still low interest rates and issuers’ growing level of comfort with risk retention rules, has been responsible for a more energized market, Trepp researchers report.

What’s more, market insiders now predict that issuance for the whole of 2017 will surpass 2016’s modest level of $69.3 billion.

Loans on office and hotel properties accounted for the largest share of CMBS loans issued in the second quarter, at 27.2 percent and 20.46 percent respectively, Trepp reports. Loans on mixed-use assets followed close behind, accounting for 19.75 percent of overall issuance.

Loans on multifamily and industrial properties made up the smallest share of the pie, at 4.2 percent and 3.01 percent, respectively.

Trepp

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