Earlier this year, it looked as if the owner of Las Vegas's Fashion Outlets mall was facing a problem: Its $107 million in debt was nearing maturity, and the credit markets weren't strong enough to refinance that entire amount.
But since then, the real-estate finance market has gotten a lot rosier. The 376,000-square-foot mall's owner, AWE Talisman, was able to borrow $32 million of junior, or "mezzanine," debt and another $73 million of senior debt that was packaged into commercial mortgage-backed securities at attractive terms.
"We're seeing deals that we thought wouldn't be able to refinance, actually refinance," said Darrell Wheeler, head of commercial-mortgage bond strategy at Amherst Securities Group.
Strong investor demand for yield in a low-interest rate world has unleashed a lending boom in commercial mortgages, producing the most favorable conditions for borrowers since 2008. The commercial-mortgage bond market, which all but died in the years following the financial crisis, is expected to see $46 billion of new issues in 2012 and as much as $65 billion in 2013.
Read more...Commercial-Mortgage Market Gets Frothy - WSJ.com
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