Market Insights

It’s Been 10 Years Since the Recession. So When Is the CMBS Market Going to Recover from the Financial Crisis Already?

A decade after the start of the Great Recession, the CMBS market has yet to recover. Over three-quarters of commercial mortgage-backed securities originated during and immediately preceding the financial crisis are no longer securitized through CMBS, CrediFi found in its January 2018 report on the role CMBS loans have been playing in the commercial real estate industry in the decade since the crisis that rattled the global economy.

There does not seem to be an indication that commercial mortgage-backed securities are poised for a comeback, at least not in the short term.

The report is based on CrediFi’s analysis of a sample of $150 billion in loans secured by 5,000 commercial properties across the United States, and aims to find out the financing fate of CMBS loans originated during the crisis and in the years immediately preceding it (2003-2008).

More than half the CMBS loans securitized from 2003 to 2008 have since moved over to lenders’ balance sheets, and under a quarter received new financing from Fannie Mae or Freddie Mac. Although commercial mortgage-backed securities did bounce back partly since practically disappearing in the immediate post-crisis years, just 23% of CMBS loans originated from 2003 to 2008 have received new CMBS financing since 2009.

CrediFi’s Refinancing CMBS: 10 Years Later report examines some of the transformations that have taken place in CMBS financing since the crisis, analyzing nationwide changes across all property types as well as differences between specific property types and markets.

It addresses what share of pre-crisis loans remained in the CMBS world as the global economy began to recover, what share moved on to lenders’ balance sheets, and what share Fannie Mae and Freddie Mac took on as they too recovered.

To download CrediFi’s full Refinancing CMBS report, click here.

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