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Main Website >>Structured Finance >>Blog >> CMBS Markets: Are They Normalizing?
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Ron D'Vari, Chief Executive Officer & Co-Founder, NEWOAK CAPITAL LLC

CMBS Markets: Are They Normalizing?
Tuesday, July 12 2011 | 09:25 AM
Ron D'Vari
Chief Executive Officer & Co-Founder, NEWOAK CAPITAL LLC

Many aspects of the newest Deutsche Bank’s CMBS deal points to the market normalization and speaks well to the resilience of the CRE and CMBS asset classes.

According to Dow Jones, the $685 million CMBS deal is backed by the restructured loans on the Whitehall's Tharaldson portfolio of 168 business hotels, covering 42.8% of the appraised value of properties and interest coverage ratio of 2.88. The restructuring was made possible by the Abu Dhabi Investment Authority capital injection as a preferred equity. The fact that institutional investors are open to single-asset-type CMBS and a sovereign fund single-handedly jumping in to take on the entire preferred position indicates the investors are confident in the economy long term and are attracted to the asset class. Another element that reflects back-to-the future attitude is Morningstar’s assignment of AAA rating to all three top tranches of the deal, while the other agencies placed a lower rating on the second and third tranches.
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