Securitisationwas a key catalyst for the recovery of the US commercial real estate market in the 1990s, following the savings and loan (S&L) debacle. We believe that the same reasons for its success in the 1990s hold true today. Despite a number of challenges, fears of past excesses being one of them, we believe that the conditions are in place for the return of securitisation. This article provides a framework of the history, current challenges and our view of the future of the new issuance market for commercial mortgage–backed securities (CMBS).
The securitisation market for US commercial real estate loans all but collapsed in the wake of the financial crisis that rocked the global economy in 2008 and early 2009. Property values dropped dramatically as virtually all forms of financing dried up. Most property types have experienced valuation declines of more than 30 percent as of year-end 2009 (according to the
