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Commercial mortgage-backed securities issuance in Europe is gaining traction, with six deals launched so far this year.
Rating agency Moody’s predicts next year’s European CMBS issuance will have greater exposure to assets including multifamily residential and specialised properties.
The follow up to KKR’s 2017 fund will continue to focus on junior tranches of commercial mortgages.
The rating agency’s analysis of office-backed CMBS transactions shows AAA- and AA-rated tranches can withstand higher vacancy rates, while lower-rated tranches are more vulnerable.
Ratings agency S&P expects the delinquency rate to climb higher for June, although European CMBS are so far weathering the storm.
The economic fallout from covid-19 has stoked fears of a liquidity crisis in US commercial property lending.
Syndication is slow and capital value forecasts are bleak, but CMBS transactions remain liquid and real estate is expected to retain relative value.
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