The percentage of commercial real estate loans paying off on their balloon date has exceeded 60% for the fifth time in the last six months, according to data from Trepp LLC.
In February, 61.8% of loans reaching their balloon date paid off, a decrease of about five percentage points from the January reading. Trepp adds that the February rate of 61.8% is well above the 12-month moving average of 49.2%.
‘Six months ago, we noted that the payoff rate could move to the upside for the remainder of 2012,’ Trepp says. ‘We mentioned that loans reaching their maturity date would likely be more heavily populated with loans from earlier vintages, and that assets from that time frame were made with lower leverage and more reasonable valuations. The result should be better payoff numbers. Data from the past six months has confirmed this trend.’