CMBS 2.0 brings more multi-borrower transactions
Transactions in the new generation of the commercial mortgage-backed securities market, known as CMBS 2.0, evolved from the largely single-borrower deals recorded in late 2009 to multi-borrower transactions in recent months, according to Standard & Poor's. In general, conduits in the new era of CMBS range in size from $1.3 billion to $2.2 billion, said S&P analyst James Manzi. "Loan counts have also remained steady and tight this year, ranging from 37 to 57 and averaging 46," he said. "Deal structure 'complexity,' as measured by the number of bond classes per transaction, has risen slightly from last year, but not by much." The multi-borrower transactions hitting the book are heavily concentrated in retail and many are located in what is considered nonprimary markets, S&P said. For the 2010 and 2011 vintange multi-borrower deals, S&P noted at least some aspect of loan underwriting for the properties is based on an expectation some material event will occur within the mortgage-backed securities. In addition, loan-to-value ratios on a weighted average basis are up in 2011 when it comes to these transactions. S&P is not the only firm to note that CMBS deals are gaining steam this year. Jones Lang LaSalle (JLL) recently reported that $9 billion in CMBS were reported in the first four months of 2011 and $40 billion is expected by the end of the year. Write to: Kerri Panchuk.