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CMBS issuance rising again
Refinancing capacity is slowly returning to retail real estate, as investors regain interest in the CMBS market. Issuance of U.S. commercial mortgage-backed securities is on track to total between $10 billion and $15 billion this year, research firm Investcap Advisers expects. That compares to $12 billion in 2008 and $3 billion in 2009. The average annual issuance in the U.S. between 1999 and 2004 was $65 billion. The years 2005, 2006 and 2007 saw a combined $602 billion of mortgage debt issuance, or an average of $200 billion per year.

Developers and landlords have reason to be encouraged about 2011, when Investcap expects CMBS issuance to reach $50 billion. “Although that is a far cry from its peak years, it is a sign that the CMBS market is coming to life a bit and may be normalizing,” said Michael P. Niemira, ICSC’s chief economist and director of research. “And it is none too soon. Delinquency rates on those legacy loans, especially on the 20052007 vintages when the sector was at its peak, are rising.”

About $80 billion in debt will mature in 2015, $117 billion in 2016 and $118 billion in 2017, he said. After 2017, maturities should recede drastically. Between 2011 and 2012, retail will account for about a quarter of the maturing CMBS debt, while office makes up about one third. By 2013, retail will amount to about a third of the total debt maturing.