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CMBS Wrapping Up Best Year Since Crisis, But What’s Next?


Commercial mortgage-backed securities are wrapping up their strongest year since the financial crisis, but several factors—including widening spreads—are leading to questions about how long the strength will last.

CMBS spreads have widened due to a myriad of factors, ranging from simple supply and demand to sluggishness in the global economic markets, the Commercial Observer reports. Back in June, quotes on CMBS were in the sub-200 range over 10-year swaps but are currently hovering closer to the 300 bps range.

While the market remains fixated on an expected rate hike from the Fed this month, a steepening yield curve may prove to be of greater significance to long-term fixed-rate lenders and borrowers.

Nationally, about $270B in CMBS loans are set to mature between now and the end of 2017. Barring an unforeseen event, volume in the CMBS market is expected to increase in 2016. [CO]

Related Topics: Interest Rates, CMBS, The Fed, spreads