Bond buyers have poured money back into the CMBS sector and the added investor demand is helping drive conduit loan issuance higher. And as investors gain confidence in the revived sector, underwriting terms and rates are becoming more favorable for borrowers.
“There is more than enough capacity for volume projections right now,” says Steven Schwartz managing director and partner with Torchlight Investors, a longstanding investor in commercial mortgage-backed securities (CMBS).
A select group of investors, including Torchlight, still buy the riskiest B-rated CMBS, earning themselves the right to set underwriting standards for conduit loans. Those standards have eased but are still much tougher than the go-go days of the last boom.
Read more...B-Piece Investors Back in Buying Mode | CMBS content from National Real Estate Investor