CMBS makes a comeback

Over the first six weeks of the year some $2 billion in US CMBS was issued by financial institutions, and analysts predict as much as $50 billion in deals by the end of 2011. Marcus Giancatterino, head of real estate finance at Citi, says that investors have become more comfortable that commercial real estate values do not have much more downside. "There wasn’t as much frothy underwriting as in residential mortgages, and with interest rates low, borrowers have continued to service their commercial real estate debt. With high yield and corporate investment grade having recovered, it is a natural place for real money accounts such as insurance companies and pension funds to start putting money into."