The Northwood Group

Building Partner Investors

Capital Market Review – August 13, 2012

August 20

It is interesting to look at how interest rates have moved over the last couple of months.  Across the board rates have continued to drop since May.  Additional lenders have continued to come back into the market.  Underwriting remains strict but there are more sources of financing re-entering the market weekly.

One note in the report that caught my attention was the Fitch Ratings which project that $24 billion of US CMBS loans are set to mature over the next 12 months and of these loans 41% would be unable to refinance (without additional cash) based on Fitch’s defined stressed refinance parameter (DSCR of 1.25, rate of 8%  amortized over 30 years).

It will be important to watch over the coming year how many of these loans default and how many are able to be refinanced.

Please see the following link for the Capital Market Review for the month of August 2012: