CMBS loan issuance is expected to total around $100 billion to $125 billion this year, a projected 25 percent increase over 2014 totals, National Real Estate Investor reported Jan. 7. However, experts said they are worried about the quality of underwriting on new CMBS transactions.
The issue is that the quality of underwriting on the new CMBS transactions has been eroding, including a proliferation of interest-only loans, an increase in leverage ratios and a drop in debt service coverage ratios. And as the industry moves in 2015, underwriting standards will only get worse, according to 88 percent of CRE Finance Council’s survey respondents. Industry professionals are most concerned about rising LTV ratios, followed by lower debt yields and an increase in interest only loans.
Read more on this story here: National Real Estate Investor Online
And see what else the Appraisal Institute is reporting on here: ANO