EcoExperience Development, Inc.

Green Building

The latest data on commercial real estate loan maturities and some
important implications The Mortgage Bankers Association assessment:

The MBA says that approximately $218 billion of commercial real estate mortgages mature in 2009. With no solution to the liquidity crisis in sight to allow refinancing, the MBA says that the second half of 2009 will see "seller capitulation." Many lenders and Special Servicers will no longer find the
current fall-back position of "loan extension" to be a viable alternative.

The $90 billion of maturing CMBS debt is massive. While CMBS loans originated in 2007 topped out at $270 billion for that year, they plummeted to $18 billion for 2008, and virtually none since the second half of 2008.

We like to believe that CMBS will come back in a reincarnation where the originating lenders keep enough "skin in the game" to keep everyone honest and make sure that due diligence and underwriting is done prudently, but that is not going to happen until the financial mess we have now gets cleaned up.

So what does all this mean to investors who have debt coming due, and
to opportunistic investors or treasure hunters looking for deep discounts?

Here is why CMBS is important to you -- particularly "special servicing":

$90 billion of CMBS debt comes due in 2009, and much more in 2010
Record defaults are projected to start in the second half of 2009
The basic rules and approaches of a Special Servicers will determine what happens to those with maturing debt on their commercial property and what may be available for "treasure hunters"