Morgan Stanley and Bank of America/Merrill Lynch are going to market in the coming days with a CMBS offering that has a kind of scary déjà vu feeling to it for investors.
The loans in the offering (MSBAM 2013-C9) have a 98.8% loan-to-value (LTV) ratio, according to Kroll Bond Rating Agency. That is above the high end of the range of the last 11 CMBS conduits Kroll has rated since September 2012. In addition, there are 29 loans packaged as part of the offering (42.7% of the pool) with LTVs that exceed 100%, according to Kroll.
Those are the kind of valuations that evoke the heady days of 2007 when commercial real estate values and liquidity soared to unsustainable levels, then collapsed. The CMBS LTVs aren’t the only numbers that conjure up peak comparisons.
Read more...CRE Liquidity: Too Much, Too Little or Just Right? - CoStar Group