Volume of maturing commercial/multi-family loans to be low in coming yearsMortgagePress.comMortgage Bankers Association, commercial and multi-family mortgage market
The Mortgage Bankers
Association has reported that the commercial and multi-family
mortgage market faces limited exposure to refinance risks stemming
from the current credit crunch through the release of its Research
DataNote. The report notes that relatively few
commercial/multi-family mortgages will mature in the next two
years.
"There's been a general impression that a large volume of
commercial/multi-family mortgages are coming due this year and
next," said Jamie Woodwell, senior director of
commercial/multi-family research at MBA. "The reality is that 2008
and 2009 will see a relatively small volume of maturing mortgages,
with the majority of commercial mortgage-backed securities (CMBS)
loans not maturing until 2015 or later."
Capturing data from JPMorgan and Wachovia Capital Markets, the
DataNote reports that there is more than $600 billion of
outstanding loans in CMBS fixed-rate deals. Of this, only $16
billion is scheduled to mature in 2008 and another $19 billion in
2009. The surge in sales and financing volume during 2005, 2006 and
2007, coupled with the fact that CMBS loans tend to have a 10-year
term, means that the majority of CMBS loans will not mature until
2015 or later. Ninety-eight billion dollars of loans are scheduled
to mature in 2015, $128 billion in 2016 and $127 billion in
2017.
The majority of the loans due in the coming years is
well-seasoned and has been amortizing. JPMorgan reports that $14
billion of the $16 billion maturing in 2008 are fully amortizing,
as are $14 billion of the $19 billion coming due in 2009. According
to Wachovia Capital Markets, more than two-thirds of the volume of
loans coming due prior to May 2009 was originated prior to
2000.
In addition to the fixed-rate conduit deals described above, the
DataNote reports that Wachovia Capital Markets has identified $30
billion of large-loan floating rate deals that will be coming due
prior to May 2009. The maturity dates of these loans are spread
throughout the period, with relatively larger volumes—3.5 and
$3.3 billion, respectively—coming due in the August and
October 2008.
The DataNote focuses on maturing mortgages in the CMBS market.
Banks and thrifts will be more likely to have shorter-term and
adjustable-rate loans, while life companies will tend to have
longer-term fixed-rate loans. Each group's maturity patterns will
also be affected by the ups-and-downs of its originations
experience.
For more information, visit www.mortgagebankers.org.
