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Distressed hotel deals are now visible, but access to many would-be discounted transactions in the sector looks restricted.
Ratings agency S&P expects the delinquency rate to climb higher for June, although European CMBS are so far weathering the storm.
It is critical for private real estate equity investors to keep a close eye on what is occurring in the debt capital markets to best understand pricing nowadays, writes Justin Curlow, global head of research & strategy, AXA Investment Managers – Real Assets.
Syndication is slow and capital value forecasts are bleak, but CMBS transactions remain liquid and real estate is expected to retain relative value.
Last month’s real estate debt fire sales at the outset of the covid-19 outbreak in the US were just the tip of the iceberg for private real estate.
Coronavirus shutdowns have pushed nearly $25bn of US CMBS loans to the brink of delinquency, and the worst is yet to come.
Lenders are facing calls to grant interest payment holidays, force majeure is on people's minds, and operational property is expected to be hardest hit.
Rating agency S&P Global is monitoring sponsors’ performance, but believes transactions are equipped to deal with liquidity stress.
German lenders are lost for words, opportunistic credit specialists are gearing up, and sponsors are dealing with a loss of income.
Colony Capital’s CEO calls for lender leniency to avert a mortgage market collapse, triggering a financial crisis.