According to the Washington Post, the financial markets are beginning to thaw. This should lead the way to increased acquisition, development and construction (AD&C) lending for residential and commercial real estate. Residential land acquisition activity should improve, as the housing market is finding solid ground and the bid-ask gap for land is shrinking. But will the ‘thaw’ come in time to finance the maturing CMBS (commercial mortgage backed securities) market? Probably not. According to Commercial Property News article from May 8th, Deutsche Bank said two-thirds of the CMBS loans which will mature in the coming decade may default. That includes the nearly $50 billion in CMBS loans to mature in 2009.
Commercial property values are expected to decline 30 percent or more in some markets.
Tags: cmbs, financial markets
