Commercial Mortgage Prices Fall in March
The aggregate value of commercial real estate (CRE) loans that collateralize commercial mortgage-backed securities (CMBS) fell to 75.9% at the end of March, from 76.5% in February, according to loan sale advisor DebtX. Since the same time last year, loan values are down from 81.2%, measured as a percent of par, which in this instance is unpaid principal balance of the loans. "Loan prices were negatively impacted by the upward shift in the Treasury yield curve and the continued deterioration of CRE fundamentals, despite improvements in the CRE capital markets," said DebtX CEO Kingsley Greenland, in a press statement. The information is based on the loans priced by DebtX. In March, DebtX priced 59,401 CRE loans with an aggregate principal balance of $697bn. The value of CRE loans that collateralize CMBS grew to 76.7% of the original loan price through January 2010, up from 75.9% in December, DebtX said in early March. Despite the January gains, loan values remained below their original prices and even below the 81.3% level reported in January 2009. The availability of credit to the CRE market is continuing to decrease as the rate at which CMBS fall behind on payments hit another new high in April. CMBS delinquencies recently climbed 34 basis points to 7.48%, a record high. Write to Diana Golobay.