DebtX Team Market Snapshots September 21, 2020

Heavy Volume Met With High Demand

September 2020

August was an extraordinarily busy month. Loan pricing volume exploded, and we bid $185MM throughout the month. Eight separate clients were represented in these sales and 38 of 42 sale offerings closed, resulting in a trade rate of 90.5%. This is a fantastic number well above the market rate. We expect increasing volatility in this area, especially with such a heavy slate of hospitality on the calendar. As we’ve noted in previous Snapshots, we’re executing exposure reduction strategies, where the objective is to selectively trim exposure within a pre-defined budget.

Key Highlights

Although busy, the market has remained relatively stable. The month was notable for the continuation of existing trends rather than big positive or negative surprises. Trends discussed in prior snapshots include:

  1. Pricing smashed expectations, exceeded the reserve price by 25%! We attribute this in part to continuing demand-supply imbalance in the small balance commercial credit secondary market.
  2. Strong investor interest. 167 investor NDA’s executed to view the portfolio, and 12 final bids. Note that a final bid is just that, final, due diligence completed with no contingencies.
  3. Strong bids across the field. This was perhaps the most encouraging statistic. A majority exceeded reserve and any one of the top five would have been deemed an eye-popping number.

Representative Transactions

$39MM NY Multi / Retail

Asset Class:
Multifamily and retail
Location:
Brooklyn and Manhattan
Sale Structure:
Individual offerings
Status:
Coming Soon
Seller:
Bank

$51MM NPL Healthcare

Asset Class:
Healthcare
Location:
Missouri
Sale Structure:
Individual loan offering
Status:
Closed
Seller:
Bank

$150MM Performing Hotel Portfolio

Asset Class:
Hospitality
Location:
Nationwide
Sale Structure:
Individual loan offerings
Status:
Closed
Seller:
Bank

$135MM Performing Hotel Portfolio

Asset Class:
Hospitality
Location:
Nationwide
Sale Structure:
Individual loan offerings
Status:
In Market
Seller:
Bank

$9MM Assisted Living

Asset Class:
Assisted Living
Location:
TX
Sale Structure:
Individual loan offering
Status:
Closed
Seller:
Bank

$39MM Performing Multifamily

Asset Class:
Multifamily
Location:
Predominantly CA
Sale Structure:
Pool
Status:
In market
Seller:
Bank

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