MBANow: Jamie Woodwell on Commercial Real Estate Trends
The Mortgage Bankers Association released a new MBANow video featuring MBA Vice President of Commercial Real Estate Research Jamie Woodwell, who discusses recent commercial mortgage market trends.
The video can be viewed at https://www.youtube.com/watch?v=jrBF-0EDT6M&feature=em-uploademail.
In particular, Woodwell addresses the “Wall of Maturities,” a large cohort of commercial real estate loans made in 2006-2007 that are coming to maturity. Woodwell said these loans are in the commercial mortgage-backed securities marketplace, nearly $100 billion of the $170 billion set to mature.
“If you look at the wall itself, we’re largely through it,” Woodwell said. “Out of about $300 billion in CMBS loans originally set to mature in 2016 and 2017, there’s just about $55 billion left…we’ll see the bulk of those loans work through by the end of the third quarter.”
At the same time, 2017 has started as kind of a “squirrely” year, Woodwell said. “Normally we see loan transactions and loan originations synch up pretty strong,” he said. “So far this year in the first quarter we saw transaction activity down about 15 percent but mortgage originations up about 9 percent, so you’ve got a bit of a disconnect there, and what you are seeing is a lot of property owners keeping their options open.”
Woodwell says he sees the overall commercial mortgage market in a bit of a “downshift.”
“It’s still moving forward, but when you look at the post-recession growth that we saw across property fundamentals, across property prices and transaction volume, all of those are a little lower now.”
Other videos in the MBANow series can be viewed at the MBA YouTube channel, https://www.youtube.com/watch?v=Swk2VUJeZFI&feature=em-uploademail. The videos are also available on the MBA Insights landing page, https://www.mba.org/publications/insights/insights-publication##SubscriberID####RND##&PageID=21109.
