CMBS Issuance Up 10% As Huge Hotel Portfolio Gets $2.3B Loan
JPMorgan Chase Bank and Deutsche Bank have delivered $2.3B in senior and subordinate financing for 451 Motel 6 and Studio 6 hotels.
About $2B of the financing will be securitized through a Motel 6 Trust, marking the first CMBS hotel transaction in more than three weeks, Trepp reports. CMBS issuance for hotel properties in 2017 so far totals $8.7B. CMBS issuances have now reached $49.2B, which is almost 10% more than the amount registered at this time last year.
This deal signals a continued shift in market activity as issuers become increasingly comfortable with new risk retention rules. These rules, enacted during former President Barack Obama's reign, fall under the Dodd-Frank Act and aim to tighten commercial lending standards. The regulations require issuers to keep 5% of the value of a loan on their balance sheets instead of selling the whole portion in the form of bonds.
According to Trepp, the market has bounced back as uncertainty regarding the regulations has waned.