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Trepp Finds 40% of Maturing CMBS Loans Result in Payoffs

Data released this week by ""Trepp LLC"":http://www.trepp.com shows that the percentage of loans held in commercial mortgage-backed securities (CMBS) paying off on their balloon date came in at just under 40 percent last month.

In August, 39.5 percent of the loan balances reaching their maturity date were settled in full, according to the New York-based market research firm.


The figure barely budged from the previous month, when 39.6 percent of CMBS loan balances were paid off at their balloon date. The August reading was just above the 12-month rolling average of 39.2 percent.

By loan count â€" as opposed to balance â€" only 43.1 percent of the loans paid off, according to Trepp's report. This was down over six points from July's reading of 49.4 percent. On the basis of loan count, the 12-month rolling average is now 48.8 percent.

Trepp explained that prior to 2008, the payoff percentages were typically well north of 70 percent.

Since the beginning of 2009, however, the company says there have only been two months where more than half of the balance of the loans reaching their balloon date actually paid off.

Trepp's analysis looks only at loans that have gotten all the way to their balloon date without having prepaid or defeased. If a loan paid off or defeased in the months prior to maturity, it is not part of the monthly assessments.