| Will CMBS bounce back? (Depends on how hard it hits the ground.)$30B in deals have occurred this year, down more than $200B from '07. |
| Yesterday, CBRE Capital Partners prez Ethan Penner, whom we snapped outside a Real Estate Lenders Association lunch in DC, said, “Usually, 80% of a deal is AAA-rated and is perceived by bond buyers to have a low credit risk, and the other 20% is anything between AA and unrated.” If a typical CMBS pool consists of 50 mortgages, investors outside AAA need to perform costly credit analysis on each one before buying into the deal. Yields on these classes are too low to justify the expense of that undertaking, creating an inherent structural problem for the CMBS market (which kind of defeats the "security" portion of securities.) |
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