The CoStar Group's Mark Heschmeyer looks at the impact of new regulations governing the commercial mortgage-backed securities (CMBS) market, specifically, the risk-retention "skin in the game" rules that have been the subject of much contention.

The new rules require loan originators to retain 5% of the loan on their own books, a retained interest that's meant to ensure more responsible lending practices. And last week, the first wave of CMBS deals that follow the risk-retention rules—an outgrowth of the Dodd-Frank bill—hit the streets with a $870.6 million, 46-property deal.

As early as six months ago, there were concerns that there would not be enough B-piece buyers to support the new CMBS structures, according to Kroll Bond Rating Agency. But the higher yields available from CMBS is beginning to attract more interest.

"In addition to some existing B-piece buyers, we are aware of six (new) players that intend to enter the market, all of which have significant industry experience and have the ability to raise capital," analysts at Kroll Bond Rating Agency noted this week.

Also, several major non-bank institutional lenders are considering becoming CMBS issuers, as opposed to contributing loans to issuers.

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