CMBS issuance in the United States got off to a slow start in the first quarter, but activity is expected to step up in coming months, according to Commercial Mortgage Alert. Only $6 billion of CMBS priced January-March, down 32% from a year earlier and virtually flat with fourth-quarter 2011. The depressed issuance reflected the slowdown in originations in the second half of 2011 because of fallout from the European debt crisis and concerns of a potential double dip in the U.S. economy.
Volume is now on pace to reach just $24 billion this year — well below the $38 billion forecast by a panel of bond pros. But lending by securitization programs picked up in the first quarter as CMBS spreads tightened. That will accelerate activity in the second and third quarters, although it’s too soon to say whether the $38-billion prediction can be achieved. All told, 11 private-label U.S. transactions priced in the first three months — four multi-borrower CMBS deals, three single-borrower CMBS offerings and the junior portions of four Freddie Mac issues.
In April, UBS and Barclays plan to team up on a $1.5-billion conduit deal instead of floating separate offerings. ValueXpress has originated loans for the UBS/Barclays issue. Meanwhile, J.P. Morgan, which didn’t have any partners in its last four conduit issues and was expected to go it alone again in March, will join forces with Ladder Capital on a $1.3-billion deal in April. And the buzz is that Cantor Fitzgerald is in talks to join forces with Deutsche on an upcoming deal. The three transactions are expected to total approximately $3.8 billion.