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CMBS Delinquency Rate Continues To Rise; Inland Western Issues $500M CMBS Deal

December 10, 2009

CMBS loans delinquent beyond 30-days now stands at about 4.47% according to Moody’s. The low was reached in late 2007, at .22%. The number is up 46 basis points month-over-month. Hit the hardest is the hospitality sector, where the delinquency rate is at 7.8%.

In other news, JPMorgan sold off $500M of CMBS for Inland Western.

Inland Western’s two top-rated classes sold at yield premiums of 1.5 percentage points and 2.05 percentage points above an interest-rate benchmark, about a third of current levels on existing CMBS made at the height of the real estate boom. The yield spreads were at the low end of expectations.

Yield spreads on 10-year CMBS sold under less conservative standards are about 5.85 percentage points, according to JPMorgan data.

…and from Bloomberg

Today’s sale is backed by a $625 million loan from JPMorgan to Inland Western. The loan allowed the company to pay off “virtually all” of its 2009 maturities and a “substantial portion” of 2010 debt, Inland Western Chief Executive Officer Steven Grimes said in a Dec. 1 statement.

And the saga continues …. credit markets starting to open up those with reasonable LTV and realistic underwriting while underwater assets continue to be squeezed.

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Categories: Commercial Finance and Lending | Commercial Real Estate Investing | Trends
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Joshua December 11, 2009

it is a tale of two markets.

REITWrecks February 19, 2010

The only thing more amazing than Inland Western's ability to raise CMBS debt is JP Morgan's ability to sell it. Before the CMBS market slammed shut in 2008, JP Morgan managed to get off the last deal of the year, and within 6 months, 20% of the collateral was in default.

Meanwhile, what are Inland Western shares worth? I have done an analysis that indicates they're worth no more than $3.50, yet management is claiming they're worth $6.85. Talk about a tale of two markets! You can see the analysis on the Non Traded REIT Forum.

Cheers, REITWrecks

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