US CMBS posts strong week despite ongoing struggles

US CMBS trading activity rebounded last week with over $800 million out for bid following one of the slowest non-holiday weeks in years, according to Trepp.

US CMBS trading activity rebounded along with US stocks last week with over $800 million out for bid following one of the slowest non-holiday weeks in years, according to Trepp.   

Among those to price were two single asset deals, the Ashford Hospitality portfolio (BAMLL 2016-ASHF) and a 61-property San Francisco multifamily portfolio (GSMS 2016-RENT).  

After tightening during the previous week, spreads remained relatively unchanged as investors warmed up to the $325 million mortgage on the Ashford Hospitality Trust hotel deal, with Class A, B, C and D classes reportedly pricing at swaps plus 190, swaps plus 300, swaps plus 400 and swaps plus 500, respectively.

imgres“Bolstered by the European Central Bank’s aggressive stimulus measures earlier this week, investor optimism rode the momentum and US stocks posted their fourth straight week of gains,” Trepp noted in a statement.

“Both the Dow and S&P 500 rose above the 200-day moving average for the first time this year on Friday. Soaring over 200 points, the Dow closed Friday 10 percent above its yearly low recorded exactly one month ago.”

CMBS has plugged along at a slow pace this year as the industry begins to question its viability as the year moves forward. Trepp numbers show that there was just $8.3 billion of issuance in the first two months of the year, compared with $13.2 billion in 2015 and $9.6 billion the previous year.

As noted previously in Real Estate Capital, many experts are slashing their yearly CMBS issuance predictions for 2016: last month Morgan Stanley lowered its issuance estimate by 30 percent to $70 billion, and Kroll Bond Rating Agency said earlier this month that it expects as little as $60 billion on the year.

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