Quarterly securitizations of non-agency commercial real estate loans climbed to the highest level in three years, while year-to-date volume is well ahead of last year.
Issuance of private-label commercial mortgage-backed securities during the period that started on July 1, 2017, and concluded on Sept. 30 came to $26.8 billion.
In addition to exceeding the $21.2 billion in CMBS issuance during the second quarter,
CRE loan securitization volume was the strongest it’s been since the third-quarter 2014.
Trepp LLC presented the numbers
in the report Q3 CMBS Issuance Recap: Surging Volume, Tighter Spreads, and Hotel Deals Galore.
During the first-three quarters of this year, CMBS issuance amounted to $58.6 billion, climbing 38 percent from the same period in 2016.
Trepp noted that based on risk-retention requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, $13.1 billion in CMBS were issued during the third-quarter 2017 using a vertical structure that requires sponsors and third-party investors to retain 5 percent of each class. Another $10.8 billion was issued using a horizontal structure that requires retention of 5 percent of the lowest bonds in the deal waterfall, and $2.95 billion were issued through a hybrid structure.
The largest CMBS loan was
the $2.075 billion MOTEL 2017-ML6 single-borrower transaction. The loan is secured by 460 lodging properties in 47 states with a west coast concentration.
