CoStar released a new article this week titled "CMBS Markets More Hardy Than Doomsters Speculated" observing that, despite analysts bracing for a flood of defaults, the CMBS markets appear to be performing better than anticipated. An excerpt:
Predictions earlier in the year of a CMBS tsunami of defaults flooding the market largely missed their mark. Delinquencies, which were forecast to hit 12% by 2012, now seem likely to top out at right around 10% this year. And issuance last year tripled from 2009's anemic $5 billion to $16.1 billion in 2010, with 40% of the year's issuance occurring in the last quarter of the year - a much faster recovery than many anticipated, according to Christopher T. Moyer, an associate with Cushman & Wakefield Sonnenblick-Goldman LLC.
"Three major factors contributing to the stabilization of the CMBS delinquency rate," David Tobin, principal of Mission Capital Advisors in New York, told CoStar. "New originations have helped reduce overall delinquency. Conduit programs have re-started or started anew because of the pending maturity avalanche that is expected, because secondary market performance of CMBS has been strong following the credit implosion, and because firms perceive CMBS to have less credit and regulatory risk than RMBS [residential mortgage-backed securities]."
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