Loan Maturities and Beyond

We are looking at $18 billion in CMBS maturities for the calendar year of 2009.  A year or two ago, that didn’t sound like a big deal.  Today, the picture has changed.

But hold on.That CMBS number for 2009 is chump change… for 2010 it swells to $65 billion, in 2011 it’s $55 billion, and in 2012, it’s back closer to $70 billion. Don’t forget to add the life company, agency, and bank maturities to those numbers and now you’re talking some real money.

So how are they going to be refinanced?  With the CMBS market effectively moribund, the life companies having severely restricted programs, the agencies having been bailed out and facing restructures and portfolio cut-backs, and banks gasping for life… the answer is the question.

In reality, there is not enough money to handle the upcoming maturities unless there is a rebirth in some form of the CMBS securitization market.  But will it happen?Possibly, but not in time.

The maturing loan market is a tsunami in formation.  The answer will be a lawyer’s dream.  There are going to be discounts, recasts, extensions, renegotiations, and a whole lot of cash out of pocket if owners want to hold onto their properties.  Did I say foreclosures?  Those too!  What faces the industry is an asset manager’s dream… in the near term that is likely to be the growth industry