National Real Estate Investor's Bendix Anderson looks at the evolution of the commercial mortgage-backed securities (CMBS) market as a heavy volume of maturing CMBS loans comes due, a sour souvenir from the last boom period.

The CMBS industry had high hopes of reclaiming its former glory entering 2016, but global uncertainty affected the capital markets negatively, making CMBS loans less competitive with those of Fannie Mae, Freddie Mac, banks, and life insurance companies. As the year has progressed, however, CMBS lender spreads have grown more competitive, giving the industry hope that it can rally in the second half.

The interest rates offered by CMBS lenders have dropped once again, to be within a dozen or so basis points of the interest rates offered by Fannie Mae, Freddie Mac, and life company lenders for loans at similar leverage ...

CMBS lenders now offer interest rates in the low 4.0 percent range for loans that cover up to 75 percent of the value of an apartment property. That’s not far from the rates offered by Fannie Mae and Freddie Mac for loans covering just 65 percent of the value of a property.

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