- Floating rate lenders including banks, debt funds, and CMBS are actively bidding new loans. In addition to increase prepayment flexibility, floating rate loans typically offer some future funding component to pay for capital improvements, tenanting costs, or loan upsizing upon increasing cash flows. Pricing for loans with these features typically range from L + high 100s to 400s depending on leverage and other considerations.
- Real Capital Analytics reported that cross-border capital was the second fastest growing capital sources last year after public capital with a 39% YOY change in total acquisitions. US property investment from China tripled last year and acquisitions by Middle Eastern buyers doubled.
- Trepp recently reported that the CMBS delinquency rate decreased 47 basis points in February, marking the ninth straight month of improvement. This is the first time the delinquency rate for US commercial real estate loans in CMBS has been below 7% since February of 2010. The rate is 264 basis points lower than it was a year ago. Rising property incomes and values continue to boost the performance of commercial and multifamily mortgage loans.
- Although the 10 year Treasury yields were up by more than 90 bps from a year ago, Real Capital Analytics data showed that the average cap rate across all property types was down by more than 20 bps in January 2014 which means that cap rate spreads decreased by more than 120 bps.
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