-- Daniel O’Leary
A major West End of London property sale is being tipped as a yardstick to gauge the health of commercial mortgage securitizations backed with similar collateral. Derwent London, a specialist U.K. property investment trust, scooped up two properties with an average rent of £34 ($53) per sq ft, or a net yield of 5.5%.
The sale is key for CMBS because the market has been plagued by illiquidity and a lack of information. “Even in the good times, CMBS was never that highly traded. It’s an asset that investors buy to hold,” one analyst said. “So to ascertain their positions now, they’re going to jump on any piece of information the market coughs up. That could be liquidations, restructures, loan extensions or, in this case, property sales.”....