Freddie Mac: Here are the top 5 improving metro markets for housing

The Census Bureau is cooking the new home sales numbers

You can’t make bricks with imaginary straw

The 12 hottest housing markets right now

And the biggest losers in the price growth race
W S
Investments

Number of CMBS loans making balloon payments skyrockets

The pay-off rate on commercial mortgage-backed securities loans making scheduled balloon payments hit 61.6% in February, the second highest performance rate since December of 2008, Trepp analytics said Monday.

The CMBS analytics firm noted the pay-off rate remained well below 50% for most months since the start of the recession and even in the tepid recovery period. The only comparable month was in September when the payoff level reached 64.4%.

This marks only the fourth time in four years that the rate has cracked the 50% point, according to Trepp. 

Balloon payments are a key component of the commercial mortgage-backed securities market. CMBS mortgages generally have a balloon payment that comes due after a certain period of time. The general expectation is that a large portion of that debt will be refinanced before a scheduled payment hits.

February's high pay-off rate is tied to the refinancing of just one loan — a $500 million loan on 9 West 57th St., a Manhattan high-rise office building known as the Solow building. Its tenants include private equity firms Kohlberg Kravis Roberts & Co. (KKR) and  Apollo Investment Corp. (AINV) That single loan represented 27% of the loans coming due, Trepp said.

Looking at the payoff rate by loan count, 64.9% of February CMBS loans paid off, up 13 points from January when that number hit 51.2%.

Before the 2008 credit crunch, payoff percentages on CMBS loans generally remained well above 70%. 

kpanchuk@housingwire.com

Recent Articles by Kerri Panchuk

Comments powered by Disqus