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

 

CMBS DELINQUENCY VOLUME

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CMBS SPECIAL SERVICING VOLUME

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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

 

RCA CPPI

 

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CMBS 2.0 Spreads

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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

 

 

 

REITCafe

  • Challenging Retail Environment Weights on REITs
    Mixed economic news is weighing on retail markets, pushing REIT performance down in 2015. This week, the National Retail Federation announced that back-to-school spending is expected to be down 9.3% in 2015. This news came on the heels of a report from the Commerce Department stating that retail sales declined 0.3%...
     
  • US REITs Feeling Effects from Turmoil in Greece and China
    International economic forces have taken center stage this week, affecting both US stock markets and REITs. The crash in the Chinese stock market and ongoing concerns about the future of Greece in the eurozone drove markets down during the first half of the week. REITs fared better than the overall market...

  • What Does Increased Construction Mean for Apartment REITs?
    REITs so far this year have raised $17.1 billion of capital through the sale of unsecured notes, bringing the total raised over the past two and a half years to just more than $75 billion. That’s more than they raised during the previous five years. The massive volume shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark...
shouldn’t be a surprise as it comes while the yield from 10-year Treasury bonds, the benchmark against which most REIT’s price their bonds
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