Daily market intelligence on mortgages, equity raising, investment sales, and CMBS.

Tuesday, 07 September 2010

Small-Cap Property Prices Fall by 24.7 Percent from Peak; Outperform Large Caps

Commercial Real Estate Direct Staff Report

Prices for small-capitalization commercial real estate properties fell by 24.7 percent from their peak in May 2007, according to a newly launched index by Boxwood Means Inc.

That's a far smaller decline than the 43.7 percent peak-to-trough drop recorded by the Moody's/Real Commercial Property Price Indices, or CPPI, which generally focuses on larger capitalization properties.

The difference between the two indices could have substantial implications, especially for banks, which hold some $1.5 trillion of real estate loans on their books. Many institutions will often use industry benchmarks in helping determine the size of loan-loss reserves. In addition, government policies are written based on those same benchmarks.

The bulk of what many banks, especially regional and community institutions, hold is comprised of small-balance loans that are generally owner-occupied. So using the CPPI as a proxy for collateral value would overstate potential losses - at least for now. "It masks some very different dynamics and performance" between large and small properties, noted Randy Fuchs, co-founder of Boxwood...


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Data Digest







Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44




cppichart FP



CMBS 2.0 Spreads


Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41





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