Key Insights from CRED iQ on 2024 CMBS Conduit Issuances

The latest research from CRED iQ offers a deep dive into the underwriting metrics of recent market transactions, focusing on 2024 CMBS (Commercial Mortgage-Backed Securities) conduit issuances. This comprehensive analysis sheds light on key loan metrics, providing a real-time understanding of trends in the marketplace.

Building on an earlier April report, which examined eight conduit transactions from Q1, this updated review explores data from 28 issuances across the year, offering insights into interest rate trends and property-type-specific performance metrics.

Discover the latest insights from CRED iQ on 2024 CMBS conduit issuances, including interest rate trends and property type analysis.

Over the past 12 months, interest rates exhibited notable fluctuations. Average rates spiked in November 2023 but have since trended downward, reflecting shifts in the lending environment.

Property Type Analysis

The report also breaks down interest rate ranges and averages by property type, revealing how different sectors are navigating the current market:

• Office:

  • Average Interest Rate: 7.16%

  • Range: 4.84% to 8.44%

  • Office loans recorded the second-highest average rates among all property types.

• Multifamily:

  • Average Interest Rate: 6.68%

  • Range: 4.68% to 8.33%

  • Multifamily investments showed competitive rates, reflecting steady investor interest and stability in this sector.

• Retail:

  • Average Interest Rate: 6.96%

  • Range: 5.18% to 9.04%

  • Retail properties experienced a broader range, underscoring variability in market dynamics for this segment.

• Hotels:

  • Average Interest Rate: 7.48%

  • Range: Highest among all property types

  • Hotel loans faced the steepest rates, likely reflecting perceived risk within the hospitality industry.

• Self-Storage:

  • Average Interest Rate: 6.6%

  • Range: 4.5% to 7.99%

  • Self-storage stood out with the lowest average rates and narrowest range, underscoring its appeal as a lower-risk investment.

Takeaways

This data underscores the varying dynamics within the commercial real estate market. While interest rates are stabilizing overall, the range and averages differ significantly by property type, reflecting distinct risk profiles and investor sentiment.

For multifamily investors, the competitive interest rate range highlights the continued attractiveness of this sector, offering a balance between risk and return.

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