Next Asset Bubble Cracks: It’s so Big even the Fed is Fretting

Next Asset Bubble Cracks: It’s so Big even the Fed is Fretting

Commercial real estate’s eight-year boom reached such breath-taking levels that even the Fed has been pointing it out as one of the reasons for tightening monetary policy. The Fed is worried because of the size of the sector, its leverage, and what it did to the banks during the Financial Crisis. And now commercial real estate prices are heading south once again.

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5 LARGEST CMBS LOAN LOSSES - MARCH 2017

5 LARGEST CMBS LOAN LOSSES - MARCH 2017

The recent trend of high monthly disposition volumes continued in March as 73 CMBS loans totaling $1.5 billion were liquidated last month, the highest such volume in 15 months. Due to the resolution of several large office and retail notes, average loan size remained elevated at $20.5 million, up slightly from $20.4 million in February. Overall loss severity ticked down for the third straight month, falling to an average loss rate of 32.17% in March from 48.76% in February, and a recent high of 57.83% in January.

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Manhattan Landlords Are Offering Massive Giveaways to Their Retail Clients

Manhattan Landlords Are Offering Massive Giveaways to Their Retail Clients
  • Incentives ‘creative solution’ as stores go dark, broker says

  • Power shifting toward merchants after rents rose to records

Manhattan landlords, who have seen retail occupancy plummet after boosting rents to record levels, are trying to avoid big price cuts. Instead, they’re writing checks for things like interior redesigns and moving expenses to keep storefronts from going empty.

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CMBS Delinquency Rate on the Rise

CMBS Delinquency Rate on the Rise

The delinquency rate for U.S. commercial real estate loans in commercial mortgage-backed securities (CMBS) reached 5.31 percent in February, an increase of 13 basis points from the previous month, according to data from Trepp LLC. The rate is now 116 basis points higher than the year-ago level of 4.15 percent, which was a multi-year low.

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