CMBS Market Stirs From Summer Doldrums
Commercial MBS dealers expect to price or begin marketing at least two conduit transactions and three single-borrower offerings totaling $3.6 billion over the next week, ending a month-long pause in issuance.
First out of the gate is a $1 billion conduit offering led by Wells Fargo. It began making the rounds with investors on Tuesday and is slated to price early next week (WFCM 2016-LC24). The other lenders that contributed loans to the collateral pool are Ladder Capital, Rialto Capital and NCB.
The long-term, super-senior bonds could be marketed with a projected spread of 106-bp area over swaps, according to early “whisper talk” circulated by dealers. That’s at the high end of the 100-106 bp range of benchmark spreads achieved in the last three conduit issues, which priced in early August.
The dealers seem to be anticipating weaker demand for WFCM paper at the other end of the investment-grade capital stack. The whisper talk was 535-bp area on the triple-B-minus class, up from an equivalent spread of 515 bp in one of the last three conduit issues (CGCMT 2016-C2) and 485 bp in the other two (CD 2016-CD1 and MSC 2016-UBS11).
Next in the conduit pipeline is an $889 million offering by Morgan Stanley, Bank of America, Starwood Mortgage and CIBC (MSBAM 2016-C30). Marketing is expected to begin in the coming days.
Elsewhere in the new-issue market, J.P. Morgan is pitching a $235 million transaction backed by the senior portion of a $275 million, floating-rate debt package that it originated Aug. 4 for WoodSpring Hotels of Wichita, Kan. (JPMCC 2016-WSP). Secured by 63 extended-stay hotels encompassing 7,557 rooms in 20 states, the debt has a two-year term with three one-year extension options. The bank plans to securitize the $40 million mezzanine portion via a separate upcoming deal (JPMCC 2016-WSP MZ).
J.P. Morgan is also close to rolling out a $900 million offering collateralized by part of a $1.2 billion mortgage that it recently wrote for Sheldon Solow on his trophy 1.6 million-sf office building at Nine West 57th Street in Midtown Manhattan (JPMCC 2016-NINE). The fixed-rate loan has a 10-year term.
Also headed to market is a $550 million securitization backed by part of a $675 million fixed-rate loan to Vornado Realty on the 3.6 million-sf Chicago Merchandise Mart (MSCBB 2016-MART). The five-year mortgage was originated by Morgan Stanley, Barclays and Bank of China.