MBA Chart of the Week: CMBS and Corporate Spreads to Swaps
Commercial and multifamily mortgage borrowing and lending have been strong in recent years, with nearly $500 billion in mortgage bankers originations in 2015 bringing commercial and multifamily mortgage debt outstanding to $2.8 trillion.
However, market volatility in the broader capital markets has increased the spreads investors demand for commercial mortgage-backed securities in recent months, leading many Wall Street analysts to reduce their expectations for 2016 CMBS issuance by 25 percent and more.
MBA recently released a Research DataNote (https://www.mba.org/2016-press-releases/march/mba-releases-research-datanote-on-sources-of-commercial-and-multifamily-mortgage-financing) that looks at the major sources of commercial real estate lending and at some of the market and regulatory changes that could affect the appetite to lend over the coming year.
While spreads have partially retreated over the last two weeks, many regulatory pressures–from risk retention rules for CMBS to new capital requirements for banks’ construction loans to volume caps on multifamily lending for Fannie Mae and Freddie Mac–remain. Concerns about future liquidity and where the market goes from here are palpable within the industry.
To view the Chart of the Week, click https://www.mba.org/news-research-and-resources/forecasts-data-and-reports/forecasts-and-commentary/chart-of-the-week.
(Jamie Woodwell is vice president of commercial/multifamily research and economics with the Mortgage Bankers Association. He can be reached at jwoodwell@mba.org.)
