CMBS In 2017 And A Look Ahead

Whether you were waiting for a "wall" or a "wave" to hit the commercial mortgage-backed securities market last year, 2017 did not deliver the massive amount of CMBS refinancings predicted by many at the end of 2016. While the volume of CMBS originations exceeded $228 billion during the heyday period of 2007, by all accounts it looks like 2017 ended with just over $88 billion in CMBS volume. While this represents a healthy increase over 2016, given the volume in 2007, it would be reasonable to expect that there were significant maturity defaults and/or a staggering amount of extensions. Not so: 2017 was on track to see a default rate of less than 5 percent in CMBS loans and no significant increase in the number of extensions relative to recent years. Even these reduced numbers might seem impressive compared to some of the dire predictions surrounding last year's implementation of risk retention to CMBS. However, that prediction fizzled as the industry adapted to the