Hart Brochure - page 7

$0
$50
$100
$150
$200
$250
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
$47
$66
$54
$78
$94
$168
$203
$230
$90
$30
$44
$80
$11
$12
$3
$41
2005 - 2007 Highest Leverage Deals
“MaturityWave”
US CMBS delinquencies peaked in January 2011 at
$90.5 billion or 11.98% of all outstanding US CMBS
debt. At the end of 2014, the total outstanding
delinquencies had declined to roughly $30.3 billion or
approximately 3.92% of all outstanding US CMBS debt.
Notwithstanding this dramatic improvement, the 2014
year-end delinquency rate remains well above the 2007,
pre-recessionary levels of 0.52%.
While there is no certainty as to the direction of CMBS
delinquencies in the US for the balance of 2015, it is
reasonable to assume the delinquencies, in particular
maturity defaults, will rise as many loans will not
support current underwriting standards. Additionally, the
much-anticipated rise in interest rates coincides with a
large number of CMBS loans that mature between 2015
and 2017. During this time, some $300 billion in loans
mature, of which $70 - $80 billion mature in 2015 alone.
U.S. CMBS Issuance by Year (in $ Billions)
THE CMBS MARKET
|
TODAY
The maturities don’t take into consideration those assets
that are stressed and are performing only because the
owners consistently subsidize the debt service shortfalls.
Unlike bank debt, CMBS instruments are subject to rules
and regulations that are administered differently from
traditional financing programs. CMBS loan servicing,
and in particular special servicing firms, provide services
and oversight for the benefit of bondholders to resolve
critical issues (such as delinquencies and defaults) when
they arise. Understanding the processes and challenges
of master and special servicers, rating agencies,
controlling classes and bondholders is the key that gives
Hart Advisors Group the unique knowledge to guide
every client toward regaining control and maintaining
the value of their property. Our team of seasoned
CMBS professionals specializes in decoding the world
of CMBS, which helps our clients achieve their goals.
*
*As of 06/01/2015 per CRE Finance
Council Compendium of Statistics
1,2,3,4,5,6 8,9,10
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