Since the beginning of September, loan-sales advisers have taken offers on some $1.5 billion of loans that they have been marketing on behalf of their bank, special servicer and government-agency clients. And the expectation is that substantially more loans - as much as $3 billion or more - will be offered in the coming weeks.
Among special servicers, LNR Partners, CWCapital Asset Management, C-III Asset Management and Midland Loan Services are each said to be preparing the sale of loans.
LNR will be offering $200 million of hotel loans through Jones Lang LaSalle and another $100 million of small-balance hotel loans through an auction venture of JLL and REDC. It will also be offering roughly $150 million of additional loans through DebtX.
Earlier this year, it [LNR] orchestrated the sale of a $1 billion portfolio that was comprised largely of small-balance loans. Those loans were sold through Eastdil Secured to four investor groups. But instead of going the bulk-sales route this time around, the Miami company is looking to sell loans individually.
CWCapital, meanwhile, will take bids for $207 million of loans later this month through Mission Capital. It has also offered loans through CB Richard Ellis and Eastdil.
The very excellent article goes on to list a number of other coming sales from banks including M&I, BB&T, KBW (for a third party) together are expected to sell another $2-3 billion in portfolio loans.
As previously noted, everyone was waiting to see how these late summer CMBS sales ($1.5 to $2 billion was CMBS loans via Eastdil and Mission Capital) went in order to judge what to do with the other $80 or so billion on special servicers' desks. At the end of the day, the big $1.04bln LNR package of small balance CMBS loans exceed expectations and were mostly bought up by a large financial institution and financed by another large financial institution (both household names) at higher than expected prices.
I don't know what that does to the market - so many buyers have to deploy capital or lose it, so maybe they acquiesce now that a high watermark has been set and they just keep bidding up prices. Surely sellers like the execution and will start flooding the market just as Orest Mandzy notes in the above article.
At the very least CMBS credit IO holders should probably start shortening their expected workout periods on the aged REOs. The LNR sale was officially announced on 4/29/2010 (there were some early looks in mid-April) and the losses were reflected on the loans on 7/21/2010. That seems pretty quick to me.