MBA Finds Short-Term Floating-Rate Loans Top 2009 Maturities

The Mortgage Bankers Association’s analysis of loan maturity volumes has determined that while concerns about a large volume of loans maturing this year are valid, the majority of those loans are short-term floating-rate CMBS and mortgages held by credit companies, warehouse facilities and other investors. Other loans, including fixed-rate CMBS, mortgages held by life companies and multi-family mortgages held or guaranteed by the general-services enterprises are in the minority. Indeed, of the $171 billion, or 11 percent of non-bank commercial and multi-family mortgages coming due in 2009, just $19 billion are fixed-rate CMBS, noted MBA vice president of commercial real estate research Jamie Woodwell during a press conference at the MBA’s Commercial Real Estate Finance/Multifamily Housing Convention & Expo yesterday. About $8 billion are GSE loans and about $17 billion are held by life companies versus $31 billion in floating-rate CMBS. In addition, given the nature of these short-term floating-rate loans, many have one-year extension options, noted Jan Sternin, senior vice president of commercial/multifamily. Even those come with challenges in the form of requirements that must be met, such as covenants and cash flow, and eventually they will come to the end of their extension options, so there is still cause for concern. But the good news is that they do make up a minority of outstanding loans. Next year, the total coming due drops to $120 billion, with about $115 billion due in 2011. Look for an upcoming interview with Jamie Woodwell on CPN Radio.