They’re Baaaack: A New CMBS Market Is Beginning to Stir
The CMBS market is beating the odds, rising again as a viable business for cash-flowing assets. In its new form, conservative underwriting and smaller deals are the new norm. The new CMBS market could speed economic recovery, but the market faces a host of challenges of its own.
At last year’s IREI/IPD RealTime conference, participants were asked to suggest opportunistic plays for the coming years. Amid lots of suggestions involving various sectors in Asia and nonperforming loans in the United States, came one suggestion to rebrand and rename commercial mortgage–backed securities (CMBS) and invest heavily. Everyone laughed. The idea of investing in securitized debt after the crash of 2008–2009 seemed even more preposterous than the suggestion to build spec offices in Central Europe (no one else is doing it, so if the CEE recovers in three years, your buildings will be the only new product in the market).
Given what had happened to the CMBS marke