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

Wednesday, 03 April 2019

Citibank Accounted for 14.6 Percent of All CMBS Loans Securitized in 1Q

Citibank contributed 50.3 loans totaling $2.4 billion to the CMBS market during the first quarter, accounting for 14.6 percent of all loans that were securitized during the period. It had contributed loans to more than one of every three CMBS deals that priced during the quarter. Meanwhile, the top five CMBS loan contributors accounted for more than half of the market's volume during the period.

The following story has been edited. Citibank's contributions previously were overstated, while Goldman Sachs' were understated.

Commercial Real Estate Direct Staff Report

Citibank contributed 50.3 loans totaling $2.4 billion to the CMBS market during the first quarter, accounting for 14.6 percent of all loans that were securitized during the period.

The bank contributed loans to 10 transactions, or more than one out of every three deals that priced during the period. Seven were single-borrower deals and the remainder were conduits.

Its volume was a third greater than Morgan Stanley's, which contributed 51.7 loans with a balance of $1.7 billion to the sector. Goldman Sachs was close behind with 31.7 loans totaling $1.5 billion.

Citi's contribution volume helped propel it to the top of a separate ranking of CMBS bookrunners, where it received credit for 4.14 deals totaling $2.6 billion, or 15.5 percent of the quarter's issuance.

Top Loan Contributors

 
 

1Q2019

1Q2018

 
 

Bal $mln

#Loans

MktShr%

Bal $mln

#loans

MktShr%

 

Citigroup

2,409.66

50.3

14.57

1,986.11

57.8

10.24

 

Morgan Stanley

1,718.18

51.7

10.39

1,010.82

30.4

5.21

 

Goldman Sachs

1,476.18

31.735

8.93

501.33

21

2.58

 

Bank of America

1,434.01

36.0075

8.67

2,596.35

57.93

13.38

 

Deutsche Bank

1,280.23

30.4

7.74

1,350.00

2

6.96

 

Credit Suisse

1,165.77

9.6

7.05

3,107.11

53.75

16.02

 

JPMorgan Chase Bank

1,153.12

34.8575

6.97

2,108.43

40.33

10.87

 

Wells Fargo Bank

985.59

61.6

5.96

976.15

41.35

5.03

 

Barclays Bank

972.34

10.85

5.88

1,402.08

19.2

7.23

 

LoanCore Capital Markets

648.49

30

3.92

0.00

0

0

 

UBS

497.91

29.2

3.01

831.65

33

4.29

 

ReadyCap

399.20

95

2.41

164.96

50

0.85

 

Societe Generale

336.16

7

2.03

670.59

14.23

3.46

 

3650 REIT

332.73

19

2.01

0.00

0

0

 

CCRE

287.02

9

1.74

534.00

15

2.75

 

Ladder Capital

256.38

24

1.55

436.54

28

2.25

 

Rialto Mortgage Finance

255.84

23

1.55

186.46

15

0.96

 

Natixis

199.00

1

1.20

992.95

6

5.12

 

Argentic Real Estate Finance

183.95

9

1.11

0.00

0

0

 

Starwood Mortgage Finance

179.41

15

1.08

231.82

17

1.19

 

Benefit Street Partners

172.08

8

1.04

79.33

6

0.41

 

KeyBank

110.50

0.75

0.67

0.00

0

0

 

C-III Commercial Mortgage

43.41

8

0.26

79.07

22

0.41

 

NCB FSB

39.31

12

0.24

57.41

16

0.3

 

CIBC

0.00

0

0.00

98.08

9

0.51

 

TOTALS

16,536.46

607

 

19,401.24

555

   

Source: Commercial Real Estate Direct

 

 

 

 

 

A total of 24 lenders contributed loans to the CMBS market during the quarter, up three from the same period last year. The sole new contributor was 3650 REIT, which contributed 19 loans with a balance of $332.73 million to CSAIL Commercial Mortgage Trust, 2019-C15. The company's Grass River Real Estate Credit Partners affiliate took down the deal's B-piece and is retaining a horizontal risk piece, allowing the deal to comply with risk-retention rules.

The 3650 REIT was formed a year ago by Jonathan Roth, who previously was president of Canyon Partners Real Estate, Toby Cobb and Justin Kennedy, who had previously founded Grass River and before that had headed LNR Property Corp. until its acquisition by Starwood Property Trust in 2012. The company, which has backing from the California State Teachers' Retirement System and TPG Sixth Street Partners, among others, funds short-term loans with fixed coupons and permanent loans.

The average size of the loans 3650 REIT contributed was $17.5 million. That compares with the $38.6 million average for Citi and the quarter's $27.2 million average for all lenders.

Profitability of 1Q2019 CMBS Conduit Transactions

Deal Name

Bal $mln

Proceeds $mln

Margin

WAC %

ssAAAPx

10-yrT %

GS Mortgage Securities Corp. II, 2019-GC38

756.44

785.34

3.82%

4.8579

91

2.71

JPMorgan Chase Commercial Mortgage Securities Corp., 2019-COR4

774.09

806.88

4.24%

5.0333

99

2.66

Wells Fargo Commercial Mortgage Trust, 2019-C49

774.23

805.64

4.06%

5.1580

98

2.69

CSAIL Commercial Mortgage Trust, 2019-C15

829.25

857.00

3.35%

5.0066

98

2.73

Morgan Stanley Capital I Trust Inc., 2019-L2

934.87

976.86

4.49%

4.9963

98

2.76

Source: Commercial Real Estate Direct

Conduit transactions so far this year have been among the most profitable in memory, thanks to lower-than-expected Treasury rates. Lenders had been writing loans while interest rates were higher and sold them through the CMBS market when rates had declined.

The prices that investors pay for CMBS bonds are a key determinant of profitability. But that's influenced heavily by prevailing interest rates. Even the best loans, if originated with low coupons and sold into a high-rate environment, risk becoming unprofitable.

Comments? E-mail Orest Mandzy, or call him at (267) 327-4281.





weekly-call-to-action

“The Weekly”

“The Weekly” is Commercial Real Estate Direct’s PDF newsletter, sent to subscribers every Friday morning. With over 100 news stories published on Commercial Real Estate Direct each week, “The Weekly” features the top stories in commercial real estate that industry participants need to know first. “The Weekly” also contains:

  • Breaking mortgage, CMBS, and REIT news

  • Quarterly league tables with rankings of B-piece buyers, book runners, and lenders

  • Industry moves and changes in “The Insider“

Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

sschartfp

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

 

cppichart FP

 

 

CMBS 2.0 Spreads

AAAspreads

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
warehouse-backstage