US Impacts European CMBS Rebound

A new article from the Wall Street Journal titled CMBS Make a Comeback in Europe examines how the commercial mortgage-backed securities market recovery in the United States is having an impact on the European market as some of the biggest US originators are ramping up European deals. While deal volume is still below pre-crisis levels, there have been seven new European CMBS issues this year worth €2.57 billion ($3.2 billion), according to data firm Trepp LLC, compared with €47.3 billion in the peak year of 2006. An excerpt follows:

In Europe, after a limited number of deals in 2012, the CMBS market slowly restarted in 2013, but was dominated by refinancing of multifamily portfolios. Last year, about €7.2 billion of CMBS was issued, but almost all of that was from the refinancing of three large German residential portfolios, according to Trepp.

"The predominance of German multifamily in new securitization at the beginning of 2013 was significant," said Patrizia Pirinoli, CMBS analyst at Goldstar Research Ltd. Most issues, she added "stemmed also from previous securitizations."

The recovery of Europe's CMBS market is partly due to work by a trade organization, the Commercial Real Estate Finance Council, which issued new guidelines for the securities in Europe, so-called CMBS 2.0. The guidelines are meant to guarantee to investors "more transparency, more access to the underlying documents," said Charles Roberts, a partner at Paul Hastings.

Many of the deals this year have been more complex than simple refinancing. Some have provided debt to borrowers to finance new acquisitions and others involved multiple loans. For example, Goldman Sachs completed two CMBS originations backed by loans on Italian portfolios owned respectively by Blackstone Group and Morgan Stanley.

Deutsche Bank has been a leading player in Europe this year. For example, in October, together with Crédit Agricole CIB, it sold a £750 million ($1.18 billion) CMBS issue to refinance the Westfield Stratford City shopping center in London. This year, Deutsche Bank also underwrote the first postcrisis multiborrower CMBS in Europe backed by two loans on retail and office buildings across the Netherlands.

Markus Kreuter, director for CRE origination at Deutsche Bank, confirmed that Deutsche Bank expects more deals and added France, Benelux and Spain among the markets that might see more CMBS activity next year. Italy is another market where, in the lights of Italian banks' negative results to the European Central Bank's stress tests, CMBS "is a product that can bring liquidity," said Mr. Kreuter.

For more news and information visit Blumberg Capital Partners.

Wells Fargo Expands CRE Lending

The end of August was busy for Wells Fargo with the Anglo Irish Bank deal, which followed the purchase of about $1.4 billion in U.S. loan holdings from the Bank of Ireland and roughly $500 million in loans bought from Allied Irish Banks PLC earlier this year. The Wall Street Journal has written an article looking at Wells Fargo's marked expansion in CRE titled Wells Fargo Jumps on Commercial Deals. An excerpt from the article:

Wells Fargo had emerged as the leading holder of commercial mortgages among banks, according to Trepp LLC, which tracks commercial property lending. During the second quarter, Wells Fargo's loan holdings grew by $3.3 billion, bringing its total to $100.2 billion, according to Trepp. The data exclude construction loans.

"We like the risk-return of the business," said David Hoyt, who heads wholesale banking for Wells Fargo.

The amount of commercial property loans held by the next five largest commercial real-estate lenders after Wells Fargo decreased by $1.3 billion, according to Trepp. While many of these banks are making new commercial real-estate loans, old loans have been maturing or have been sold off at a faster pace than new loans have been made.

Still, Wells Fargo has been far more aggressive than other banks, partly because it was less wounded by commercial real estate than many competitors, some of which virtually shut down lending in the sector through much of the downturn.

For more news and information visit Blumberg Capital Partners.

Investcap Advisors Acquired by Trepp

Trepp LLC announced that it has acquired Investcap Advisors LLC, a Waltham-based commercial mortgage backed securities (CMBS) firm according to a GlobeSt article. The terms of the deal were not disclosed, but Trepp has said that the new acquisition will expand its offering of commercial real estate loan and property surveillance products. Scott Barrie, Investcap’s founder, will be joining Trepp as a managing director.

"We are thrilled to be joining the Trepp team," said said Scott Barrie, managing director of Investcap Advisors. "I look forward to helping Trepp expand the depth and breadth of its offerings and I welcome all of the additional benefits that Investcap clients will get given the talent and scale of the Trepp organization."

"We are constantly striving to increase the value of our services and I am confident that our acquisition of Investcap is aligned with that objective," said Annemarie DiCola, Trepp's CEO. "We have great respect and admiration for Investcap and I look forward to leveraging their great real estate and technology expertise."

For more news and information visit Blumberg Capital Partners.