Many observers and other analysts have expressed concern in recent months about the
number of commercial loans (including those on apartments) would be coming due and
wound need refinancing in the next year or so. Some of these observers opined that
many of these owners would not be able to successfully refinance in a market with
much more stringent underwriting standards than those that existed a few years ago
when the loans were originated. The report by the Mortgage Bankers Association,
summarized below, finds that the number of loans which might experience difficulty
is much smaller than others had estimated earlier.
MBA Finds Short-Term Floating-Rate Loans Top 2009 Maturities
Feb 10, 2009 By: Suzann D. Silverman, Editor-in-Chief, COMMERCIAL PROPERTY NEWS
The Mortgage Bankers Association’s analysis of loan maturity volumes has determined
that while concerns about a large volume of loans maturing this year are valid, the
majority of those loans are short-term floating-rate CMBS and mortgages held by
credit companies, warehouse facilities and other investors. Other loans, including
fixed-rate CMBS, mortgages held by life companies and multi-family mortgages held
or guaranteed by the general-services enterprises are in the minority.
Indeed, of the $171 billion, or 11 percent of non-bank commercial and multi-family
mortgages coming due in 2009, just $19 billion are fixed-rate CMBS, noted MBA vice
president of commercial real estate research Jamie Woodwell during a press
conference at the MBA’s Commercial Real Estate Finance/Multifamily Housing
Convention & Expo yesterday. About $8 billion are GSE loans and about $17 billion
are held by life companies versus $31 billion in floating-rate CMBS.
In addition, given the nature of these short-term floating-rate loans, many have
one-year extension options, noted Jan Sternin, senior vice president of
commercial/multifamily. Even those come with challenges in the form of requirements
that must be met, such as covenants and cash flow, and eventually they will come to
the end of their extension options, so there is still cause for concern. But the
good news is that they do make up a minority of outstanding loans.
Next year, the total coming due drops to $120 billion, with about $115 billion due
in 2011.
No comments yet.