Capital markets overview
Download
1 / 7

Capital Markets Overview - PowerPoint PPT Presentation


  • 114 Views
  • Updated On :

Capital Markets Overview. Dennis Williams Managing Director NorthMarq Capital May 2011. Key Themes of 2011. Conduit collateral performance still declining. Total delinquency rate 9.4% as of Q-1 2011.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about 'Capital Markets Overview' - chiko


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
Capital markets overview l.jpg

Capital Markets Overview

Dennis Williams

Managing Director

NorthMarq Capital

May 2011


Key themes of 2011 l.jpg
Key Themes of 2011

  • Conduit collateral performance still declining.

    • Total delinquency rate 9.4% as of Q-1 2011

  • New underwriting standards and projected loan volumes are still not sufficient to rollover debt maturities.

  • CRE fundamentals are slowly improving, but weak across most major property segments and markets.

  • 2011 ushered in the rebirth of the life insurance companies , banks and the return of new CMBS issuance.

    • Underwriting more aggressive and “strike zone” widening


Banks hold largest share of cre loans l.jpg
Banks Hold Largest Share of CRE Loans

  • 44% of commercial real estate loans are held on bank balance sheets.

  • CMBS accounts for 21% of the $3.4 trillion commercial real estate market



Commercial mortgage delinquency rates by lender type l.jpg
Commercial Mortgage Delinquency Rates by Lender Type

  • Sources: Fannie Mae, Freddie Mac, Morgan Stanley Research

  • CMBS: 9.4%; Life Companies: 0.5% Fannie Mae: 0.62%; Freddie Mac: 0.12%; Banks and Thrifts: 3.6%


A new world commercial mortgage underwriting 2007 to present l.jpg
A New World: Commercial Mortgage Underwriting 2007 to Present


Looking ahead l.jpg
Looking Ahead:

  • Agencies Remain Reliable:

    • Rates and terms remain attractive, but underwriting guidelines penalize properties showing any weakness

  • Rebirth of Life Companies:

    • In 2009, 60% of Life Co’s said they were “in the market”

    • In 2011, 95% are “in business” with allocation goals indicating at least $50 billion in originations

  • CMBS Returns:

    • Rates in the high 4’s to mid 5’s, up to 75% LTV, all major property types

  • Underwriting:

    • Rents to lesser of actual or market

    • Lender-imposed minimum vacancy by property type/market

    • Special attention to rollover (reserves or cash flow sweeps)

    • LTV: 65-75% on real cap rate

    • DSC: 1.25x–1.40x