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Comprehensive Capital Market Solutions For Commercial Real Estate NC CCIM – 2013 Commercial Real Estate Forecast.

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Presentation on theme: "Comprehensive Capital Market Solutions For Commercial Real Estate NC CCIM – 2013 Commercial Real Estate Forecast."— Presentation transcript:

1 Comprehensive Capital Market Solutions For Commercial Real Estate NC CCIM – 2013 Commercial Real Estate Forecast

2 Loans are subject to credit approval. Source: Commercial Quarterly Data Book – 3rd Q 2011 Mortgage Bankers Association Commercial Banking 34% CMBS, CDO, and other ABS Issues 24% Agency and GSEs 16% Life Insurance Cos 14% State & Local Gov 2% Others 10% $2.38 Trillion, Q Commercial / Multifamily Debt Outstanding Comparison By Investor Group Commercial Banking 33% CMBS, CDO, and other ABS Issues 26% Agency and GSEs 14% Life Insurance Cos 13% State & Local Gov 7% Finance Companies 2% Others 5% $2.37 Trillion, Q3 2011

3 Loans are subject to credit approval. Source: Commercial Quarterly Data Book – 3rd Q 2011 Mortgage Bankers Association Commercial and Multifamily Mortgage Flows Net Change in Commercial and Multifamily Mortgage Debt Outstanding, by Sector (in Millions)

4 Loans are subject to credit approval. Compared to Q3 2011…… Q origination volumes 7% lower. Borrowing slowed in Q3 despite low interest rates due to moderate pace of commercial transactions (retail and office) and a continued drop in loan maturities. Property types that increased were hotels (4%), industrial and healthcare (19%), multifamily (30%). Among investors, life company loans decreased by 32%, 8% increase for commercial banks, 30% increase for GSEs, no change in volume for CMBS. Source: Commercial Quarterly Data Book – 3rd Q 2011 Mortgage Bankers Association Commercial and Multifamily Mortgage Loan Originations

5 Loans are subject to credit approval. Outstanding U.S. CRE Debt Total Commercial and Multifamily = [$2.42 Trillion]  Insurance companies = [$338 Billion (14%)]  GSEs = [$369 Billion (15.25%)]  CMBS = [$579 Billion (24%)]  Banks/Thrifts = [$811 Billion (33.50%)]  Other = [$319 Billion (13.25%)]

6 Loans are subject to credit approval. Source: Commercial Quarterly Data Book – 3rd Q 2011 Mortgage Bankers Association Quarterly Originations

7 Loans are subject to credit approval. Quarterly Issuance of CMBS Billions of Dollars

8 Loans are subject to credit approval. $2.38 trillion in outstanding commercial/multifamily mortgage debt in Q3 2012, $6.6 billion higher than Q2 2012, as three of the four major investor groups increased their holdings. Fannie, Freddie, FHA, life insurance companies, and banks all increased their holdings and/or guarantees of commercial and multifamily mortgages, outpacing a decline in the balance of commercial and multifamily mortgages held in commercial mortgage backed securities. Source: Commercial Quarterly Data Book – 3rd Q 2011 Mortgage Bankers Association Commercial and Multifamily Mortgage Loan Market Share

9 Loans are subject to credit approval. Based on UPB by Investor Group at end of Q Life Companies0.12% (60+ days) (0.19% in 2011) Freddie Mac 0.27% (60+ days) (0.33% in 2011) Fannie Mae 0.28% (60+ days) (0.57% in 2011) Banks 2.93% (90+ days) (3.76% in 2011) CMBS 8.86% (30+ & REO) (8.92% in 2011) Source: Commercial Quarterly Data Book – 3rd Q 2011 Mortgage Bankers Association Delinquency Rates DQ rates decreased for commercial and multifamily mortgage loans in Q3 DQ rates on bank-held loans is at lowest level since beginning of 2009 DQ rates for CMBS continues to stabilize.

10 Loans are subject to credit approval. CMBS Maturities $492 Billion over next six years CMBS Maturities (In Billions) Total≤ 1.0x1.0x x> 1.20xLTV > 100% 80%-100% LTVLTV < 80% 2013 $ $ 6.36 $ 5.35 $ $ $ 3.85 $ $ $ $ $ $ $ Source: TREPP

11 Loans are subject to credit approval What Was Hot Multifamily – 80% LTV, 4% rate Grocery-Anchored Retail – 75%, 4.25% Office – 70%, rollover, TIs Industrial – 70%, 20 year amort 2013 What’s Hot Multifamily – 85%, 3.50% Grocery-Anchored Retail – 75%, 4% Office / MOB – 75%, rollover, focus on TIs Industrial – 75%, rollover Hospitality – 70%, 10.75% DY, 235bps over Self-Storage – 75% Credit Retail – fully amortizing to lease term CMBS – 75%, A-B Structures down to 1.10x 2012 What Wasn’t Unanchored Retail – 60%, rollover Hospitality/Lodging – go away Self-Storage – 9% caps 2012 What’s Not Unanchored Retail – 65%, historical tenancy

12 Loans are subject to credit approval. Historical 10 Year Treasury Yield Curve, 1962 – 2013 July % 1.38% July 2013

13 Loans are subject to credit approval. 10 Year Treasury Yield Curve, March 2011 to March Year Treasury Yield Curve, March 2012 to March % 1.71% 2.27% 2.37% 1.38% 2.03% -99bps

14 Loans are subject to credit approval. Bob Hukill, Senior Vice President | Velinda Dismukes, Assistant Vice President | Wesley Fricks, Analyst | Grandbridge Real Estate Capital – Raleigh Office 700 Spring Forest Rd, Suite 325 Raleigh, NC 27609


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