DebtX, which provides third-party loan valuation services for both public and private clients, says that the price of commercial real estate (CRE) loans underlying the commercial mortgage-backed securities (CMBS) universe continued to strengthen in March.
‘CMBS loan prices reflect a fully recovered market,’ says Will Mercer, managing director for DebtX. ‘Market fundamentals have contributed to price increases over time, but underwriting standards are being adhered to and the backlog of problem loans has effectively been addressed.’
As of the end of March, DebtX priced $870 billion in CRE loans that collateralize U.S. CMBS trusts. The estimated price of whole loans securing this universe increased to 99.6% at the end of March, from 99.0% at the end of February. Prices were 94.7% in March 2014.
Median adjusted loan-to-value remained at 59% in March, and median debt service coverage ratio increased to 1.43. Median estimated loan yield remained at 4.1%.