JULY 14, 2016

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CMBS issuance hits four-year low

by Reg Clodfelter

CMBS issuance is at its lowest level in four years after only $9.5 billion of new CMBS offerings, divided among 17 transactions, was issued during second quarter 2016, according to the latest report from Trepp.

That total brings year-to-date issuance to $27.3 billion, down 47.3 percent from the $57.3 billion in CMBS issuance during first half 2015. The numbers have not been this low since 2012, when investors first began warming back up to the asset class after it was virtually nonexistent following the global financial crisis.

“The leading issue was the spread widening that accompanied the flight to quality by investors late last year and early this year, which led to a widening of bond spreads in not only the CMBS market but in all fixed-income securities markets,” explains Orest Mandzy, managing editor with Commercial Real Estate Direct, a unit of Trepp.

“That made it really difficult for lenders to profitably write loans and secu

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