CMBS Defaults Coming, Haven’t Yet Arrived En Masse

2010, 2011 and 2012 will be difficult years with a significant number of commercial mortgages reaching the end of their five-year lifespans, but another set is coming due in 2015, 2016 and 2017.

About $185 billion of the $600 billion in commercial mortgage-backed loans issued between 2005 and 2007 are scheduled to mature between 2010 and 2012. It’s not only CMBS that market watchers should be worried about, because $1 trillion worth of commercial mortgage maturities will occur by 2012, including CMBS, bank loans and insurance company loans.

There are many hungry buyers sitting on the sidelines with cash ready to pounce.  A limited number of them have been able to find bargains, but most of coming commercial real estate defaults will occur in Office and Retail, with Industrial markets holding better ground.  The Central Los Angeles Industrial market has witnessed very few CMBS defaults at this time.

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