Commercial real estate loan prices rose in September

Summary:  With limited supply and increasing demand, commercial mortgage prices improved in September for both performing and non-performing loans.  The values on September 30, 2013 relative to earlier values are as follows:

Performing September 2013: 91.5/100 par September 2012: 88.7/100 par

Impaired

• September 2013: 79.2/100 par
• August 2013: 79/100 par
• September 2012: 88.7/100 par

Non-performing

• September 2013: 52.8/100 par
• August 2013: 51/100 par
• September 2013: 50.9/100 par

Boston --(Boston Business Journal)--
Prices for commercial mortgages traded higher in September, while market values for non-performing and impaired CRE loans also improved, according to DebtX, a third-party provider of loan valuation services.

“CRE loans continue to sustain pricing gains from the significant rally last year,” said DebtX Managing Director Will Mercer in a statement. “We don’t see any weakening of demand from the buy side, and supply is still limited.”

The estimated price of loans backing commercial mortgage-backed securities increased to 91.5 cents on the dollar as of September 30, up from 88.7 in the year-earlier period.

Among impaired performing loan prices, the average price was 79.2 percent of face value as of September 2013, up from 79 percent in August 2013. Prices were 78 percent in September 2012.

The weighted average monthly price of non-performing CRE loans traded through DebtX’s was 52.8 percent of face value as of September 2013, up from 51 percent in August 2013. Prices were 50.9 percent in September 2012.

Meanwhile, the Loan Liquidity Index, a monthly barometer of liquidity for pools of loans sold at DebtX, was 103.4, up from 99.7 in August 2013.

http://www.bizjournals.com/boston/real_estate/2013/10/cre-loan-prices-up-in-september.html