Distressed Assets in a Volatile Economy: Investor Opportunities and Strategies for Acquisition and Resolution of Specially Serviced CMBS Commercial Real Estate Assets (Kelly Wrenn) - ULI fall meeting - 102711
Similar to Distressed Assets in a Volatile Economy: Investor Opportunities and Strategies for Acquisition and Resolution of Specially Serviced CMBS Commercial Real Estate Assets (Kelly Wrenn) - ULI fall meeting - 102711
Similar to Distressed Assets in a Volatile Economy: Investor Opportunities and Strategies for Acquisition and Resolution of Specially Serviced CMBS Commercial Real Estate Assets (Kelly Wrenn) - ULI fall meeting - 102711 (20)
International Business Environments and Operations 16th Global Edition test b...
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Distressed Assets in a Volatile Economy: Investor Opportunities and Strategies for Acquisition and Resolution of Specially Serviced CMBS Commercial Real Estate Assets (Kelly Wrenn) - ULI fall meeting - 102711
6. CMBS Market Composition Source: TREPP LLC, Market Snapshot, October 24, 2011 As of September 2011, the total amount of outstanding CMBS loans was approximately $618 billion . Office 30.22% Retail 29.98% Multifamily 14.24% Industrial 4.79% Other 11.35% Lodging 9.42%
7. There is currently a 9.63% delinquency rate for CMBS real estate loans nationwide. Source: TREPP LLC, Market Snapshot, October 24, 2011 Commercial R/E Loan Delinquency Rates Delinquency Rate
8. Loans in Special Servicing Approximately 13% or 4,400 of CMBS real estate loans are in Special Servicing, representing a total loan balance of nearly $82 billion . UPB ($billion) % of total CMBS universe Source: Fitch Ratings, CMBS 2Q2010 Servicing Update , August 11, 2010; TREPP LLC, Market Snapshot, October 24, 2011 2005 2006 2007 2008 Q4 2009 Q4 2010 Q4 2011 Q2
9. Types of Collateral in Special Servicing Office projects represent 29% of current Special Servicing volume — up almost 17% from year-end 2009. Source: TREPP LLC, Market Snapshot, October 24, 2011 Office Multifamily Retail Lodging Other Industrial 5% 10% 15% 20% 25% 30% 35% 29.0% 20.1% 21.1% 14.3% 10.9% 4.7%
10. Underlying Collateral in Special Servicing: Geographic Distribution Source: TREPP LLC, Market Snapshot, October 24, 2011 3.0% 24.6% 19.2% 3.1% 7.4% 10.4% 2.9% 11.1% 15.0% Collateral outside US: 0.3%
11. REO Properties Held by Special Servicers: Geographic Distribution Source: TREPP LLC, Market Snapshot October 24, 2011 3.5% 8.6% 23.0% 5.0% 14.5% 11.5% 1.8% 16.0% 15.9% Properties outside US: 0.2% Approx. Count: 980 REO
12. Types of REO Properties in Special Servicing Source: TREPP LLC, Market Snapshot October 24, 2011 Office Multifamily Retail Lodging Other Industrial 5% 10% 15% 20% 25% 30% 35% 24.5% 22.6% 32.6% 12.3% 4.4% 3.6%
13. CMBS Loan Maturity Timeline Nearly $559 billion (91%) of outstanding CMBS real estate loans will mature within the next 6 years . Source: TREPP LLC, Market Snapshot , October 24, 2011 Outstanding Loan Balance (billions)
14. 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 $50 billion $100 billion $150 billion $200 billion $250 billion CMBS New Issuance In the first three quarters of 2011, there was $26.7 billion of new CMBS issuance — more than double the 2010 total. Source: TREPP LLC, Market Snapshot, October 24, 2011 2011
15. The Spectre of Long-Term Unemployment There are 1.0 million additional “discouraged workers” who have given up on looking for employment. Long-term unemployment (6 months+) has grown by almost 400% — from 1.3 million people in 2007 to 6.2 million people in 2011. In August 2011, there are 4.7 workers for every available job in the U.S.; before the Great Recession (December 2007) there were 1.5 . Source: U.S. Bureau of Labor Statistics, September 2011