From a peak of US$230 billion in 2007, CMBS issuance plunged to US$2.7 billion in 2009.
As the past two years have shown, the 2008 crash in the CRE market has not limited its impact to banks. The extreme drop in CRE collateral values spilled into the commercial mortgage-backed security (CMBS) market.
While values have recovered to some extent, in December 2011, the number of commercial property loans that collateralize CMBS and were at least 30 days delinquent accounted for 9.58% of all such loans, marking the 12th consecutive month that delinquencies were above 9%.
So far, the CMBS delinquency rate has not fully slowed the nascent recovery of the CMBS new issuance market. From a peak of US$230 billion in 2007, CMBS issuance plunged to US$2.7 billion in 2009. Since then, the CMBS market has started to recover, with approximately US$32 billion in CMBS sold in 2011.
Total delinquencies as a percent of outstanding balance
Source: Moody's, Data as end of December 2011
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