CMBS AFTER SANDY

Storm damage might be the final straw for investors considering those legacy CMBS properties (those issued in '08 or earlier) whose debt service is in the red or barely in the black. For new deals, though, the CMBS conveyor belt will keep moving despite a two-day break. And deals likely will continue to come to market, albeit with a few-day delay.
This afternoon, Trepp's Manus Clancy told us marginally performing CMBS properties were worrisome for investors in the first place, and the prospect of rebuilding or renovating is beyond the risk some owners might want to assume. Trepp, nonetheless, is optimistic that CMBS, like New Yorkers, will survive and triumph. (CMBS is noted to be a good swimmer.) Manus says CMBS losses during hurricanes Floyd and Irene were minimal, and the market's ability to sell bonds went unscathed. Most properties along the Eastern Seaboard are performing and should continue to do so. Exceptions, he says, could be damaged properties that turn out not to have adequate insurance or be eligible for government aid.

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Related Topics: Eastern Seaboard , Manus Clancy
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