DebtX July CRE loan value up to 79.4%
The value of commercial loans priced by The Debt Exchange in July that collateralize commercial mortgage-backed securities rose to 79.4% of the original balance. DebtX said the value is up from 77.4% in June, marking the fourth-straight month of increases, and is higher than the 71.1% for the year-ago July. The values are based on loans priced by DebtX. In July, the company priced 57,801 CRE loans with an aggregate principle balance of $679.5 billion that collateralize 623 CMBS trusts. Increased activity in the CMBS new issue market and strong demand for distressed CRE loans in the secondary market helped improve prices, the Boston-based loan sale adviser said. "Despite weak CRE fundamentals and increasing levels of delinquencies and defaults, 90% of CMBS loans are still performing," said DebtX chief executive Kingsley Greenland. "The outlook for CRE loans that collateralize CMBS continues to improve due to increased activity in the CMBS new issue market and strong demand for distressed CRE loans in the secondary market. Investors have become more comfortable that loan valuations have stabilized and are looking to achieve better risk-adjusted yields." Write to Jason Philyaw.