For commercial mortgage-backed securities (CMBS), 2011 has started brightly, in the US at least. In 2010, there were fewer than 10 securitisations of commercial real estate (CRE) loans in the US, totalling no more than $10bn. Market participants expect five or six deals in the first quarter of 2011 alone, which will exceed the total value of CMBS issued last year, with the figure for the full year reaching between $40bn and $55bn. It is still a far cry from the $230bn issued in 2007, but then that level of issuance is probably not desirable.
“Nobody believes we will get back to the 2007 numbers, because there were some lending practices that were not sustainable. But reaching an annual figure of about $100bn within the next couple of years seems a realistic target,” says Ben Aitkenhead, head of US CMBS at Credit Suisse.
