CMBS Market Delays Pile Up Amid Global Uncertainty

Strategic Insights -

The commercial mortgage-backed securities market is facing significant uncertainty, with at least three CMBS deals delayed in recent weeks due to market weakness, geopolitical tensions, and changing investor sentiment. The latest delays involve a $1.9 billion CMBS linked to a portfolio of office buildings owned by Columbia Property Trust Inc. and Allianz SE, and a commercial mortgage-backed security led by Deutsche Bank. This adds to the list of previously delayed CMBS, including a $1.5 billion offering linked to Deutsche Bank's new headquarters in Columbus Circle.

Key Takeaways:

  • The CMBS market is experiencing significant uncertainty, with at least three deals delayed in recent weeks due to market weakness, geopolitical tensions, and changing investor sentiment.
  • The $1.9 billion CMBS linked to a portfolio of office buildings owned by Columbia Property Trust Inc. and Allianz SE was initially marketed on February 16 and was expected to price during the week of February 21.
  • The deal, known as CXP 2022-CXP, is tied to seven office buildings located in New York, Boston, San Francisco, Jersey City, and Washington, D.C. and was meant to help finance the privatization of Columbia Property Trust, which is being taken private by Pacific Investment Management Company for $3.9 billion, including debt.
  • The fact that the Columbia Property deal is tied to office buildings, a class of property where revenue is uncertain now as more people work from home, did not help the matter, according to investors.
  • Daniel McNamara, founder and CIO of Polpo Capital, a CMBS hedge fund, commented that "volatility and office are not a great combo."
  • CMBS without backing from government-sponsored enterprises, tied to offices and other kinds of real estate, hit a post-crisis issuance record last year with sales of more than $155 billion, according to data compiled by Bloomberg News.

Statistics:

  • At least three CMBS deals have been delayed in recent weeks.
  • The $1.9 billion CMBS linked to a portfolio of office buildings owned by Columbia Property Trust Inc. and Allianz SE was initially marketed on February 16.
  • The deal, known as CXP 2022-CXP, is tied to seven office buildings located in New York, Boston, San Francisco, Jersey City, and Washington, D.C.
  • The CMBS market has become unpredictable, with steep moves in yields resulting in more deals getting postponed.
  • The privatization of Columbia Property Trust is valued at $3.9 billion, including debt.

Sources:

  • Bloomberg News: "CMBS Delays Pile Up Amid Global Uncertainty"
  • Bloomberg: "Columbia Property Trust Inc. and Allianz SE $1.9 billion CMBS deal delayed"
  • Bloomberg: "Deutsche Bank COMM 2022-LSC CMBS deal delayed"
  • Bloomberg: "CMBS without backing from government-sponsored enterprises, tied to offices and other kinds of real estate, hit a post-crisis issuance record last year with sales of more than $155 billion"