CBRE Capital Markets eNews

Today Bloomberg reports, The Federal Reserve, European Central Bank and four other central banks lowered interest rates in an unprecedented coordinated effort to ease the economic effects of the credit crunch. The Fed, ECB, Bank of England, Bank of Canada and Sweden's Riksbank each cut their benchmark rates by half a percentage point. The Bank of Japan, which didn't participate in the move, said it supported the action. Switzerland also took part. Separately, China's central bank lowered its key one-year lending rate by 0.27 percentage point.

The Commercial Mortgage Alert reports, “We estimate total commercial mortgage debt maturities for banks’ portfolios, insurance portfolios and CMBS to be $280 billion in 2009 and $320 billion in 2010. To date, CMBS credit performance (delinquencies) has outperformed bank portfolio loans.”

According to the MBA Databook, despite the malaise in new mortgage production, the data on the $3.4 trillion in outstanding commercial/multifamily mortgages show continued growth and relative strength. Despite the significant drop in mortgage originations, investors increased their holdings of commercial/multifamily mortgages during the quarter – as the relatively low level of originations exceeded an even lower level of portfolio run-offs. Between the first and second quarters, investors added $51 billion of commercial/multifamily mortgages (net) to their portfolios, a 1.5 percent increase.

Today Bloomberg stated, “Britain's banks will get an unprecedented 50 billion-pound ($87 billion) government lifeline and emergency loans from the central bank after the freeze in credit markets threatened to bring down the financial system. The government will offer to buy preference shares to help boost capital at Royal Bank of Scotland Group Plc, Barclays Plc and at least six other banks, the Treasury said in a statement today. The plan also guarantees about 250 billion pounds of loans and increases the amount the Bank of England makes available for banks to borrow to at least 200 billion pounds.”