Boston-based loan sale advisor DebtX said declining commercial real estate performance and rising risk-free rates caused prices on auctioned commercial loans to fall slightly in December.
The aggregate value of commercial real estate (CRE) loans priced by DebtX that collateralize commercial mortgage-backed securities (CMBS) fell to 75.9 percent as of Dec. 31, 2009, down from 77.7 percent as of Nov. 30, 2009.
In 2009, loan prices declined by 5.4 percentage points from 81.3 percent on Jan. 30, 2009 to 75.9 percent on Dec. 31, 2009.
"Weakening commercial real estate fundamentals were a major theme of 2009," said William Looney, president of Loan Sales of DebtX. "In December, the trend of declining CRE performance, combined with rising risk-free rates and a steepening yield curve, led to another drop in US CMBS collateral prices."
DebtX priced 60,360 commercial real estate loans with an aggregate principal balance of $706 billion as of Dec. 31, 2009. Each of these loans, which collateralize 628 U.S. CMBS trusts, received a DXMark. DebtX’s valuations are based on actual secondary market sales of CRE loans that take place at DebtX, according to a statement.
