$233.9B Mall loans remain stable despite retail struggles
With the rise of e-commerce giant Amazon and a wave of store closings by iconic
retailers such as JCPenney and Sears, the struggles of regional malls have been in the
spotlight. Post-recession retail loans backed by mall properties and packaged into commercial mortgage-backed securities, however, have been performing quite well, according to Morningstar Credit Ratings. A total of $4.05 billion in mall-backed loans were
originated in 2012, for example. Of that amount, four loans with a total balance of $263.5
million have been placed into special servicing, and just one loan in the entire vintage is
expected to post a loss, according to Morningstar.
GSEs green-lending programs expand rapidly
The government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac last year
bankrolled an explosion in lending involving green apartment properties. The GSEs in
2017 collectively financed more than $46 billion in loans used to purchase or refinance
apartment buildings that met water- and energy-efficiency standards. Fannie, which
launched its program in 2012, financed $27.6 billion in green loans last year, up from
roughly $3.6 billion in 2016. Freddie last year bankrolled $19 billion in green loans, an
increase from $3.3 billion in 2016.
Commercial asset prices reach new heights
Sales prices of significant commercial assets continued to push into new territory
to begin the year, Real Capital Analytics (RCA) reported. RCA’s all-property index —
which tracks the aggregate price of properties valued at $2.5 million or more based
on sales transactions — rose 50 basis points this past February and by 8.1 percent
year over year, the company said. The index was 21 percent higher in February than
during the pre-recession peak reached in July 2007.
Commercial mortgage debt tops $3 trillion
Total mortgage debt outstanding that is tied to commercial and multifamily properties reached $3.18 trillion to end 2017, according to the Mortgage Bankers Association
(MBA). Outstanding mortgage debt rose by 6. 7 percent in the year, or by $200.3 billion,
MBA said. Commercial banks continued to hold the largest share of commercial/
multifamily mortgages, $1.3 trillion, or 40 percent of the total, the trade group said.
All major investor types increased their holdings in the fourth quarter of 2017, MBA said.
Apartment fundamentals cool to begin 2018
The U.S. apartment market’s performance dipped slightly during the first quarter of
2018, the real estate analytics company RealPage reported. Occupancy declined by
50 basis points year over year, to 94. 5 percent. Annual rent growth cooled to 2.3 percent
over the period, the slowest pace of increase since third-quarter 2010, the company said.
The softer occupancy rate represents a more normal level after an unusually tight
period between 2012 and 2017, according to RealPage. n
By Victor Whitman
The estimated number of U.S. office-sector
jobs added over the 12 months ending
this past March
Source: Reis Inc.
The annual gain through this past February
in the sales prices of large commercial assets
located in core markets
The dollar volume of 2017 loan originations
involving multifamily assets, the most of
any commercial asset type
Source: Mortgage Bankers Association