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CMBS Spreads Widen Again

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CMBS Spreads are at their widest point since March. And analysts are blaming the retail sector this time.

Yields on commercial real estate securities relative to benchmark rates rose to the highest since March on concern that retailers won't be able to repay debt as consumers cut spending.

Spreads on AAA rated commercial mortgage-backed bonds widened 10 basis points during the week ended yesterday to 250.5 basis points more than 10-year swap rates, according to data from Bank of America Corp. A basis point is 0.01 percentage point.

Demand for commercial real estate securities is waning as retailers are forced into bankruptcy during the economic slowdown. Mervyn's LLC, Linens 'n Things Inc., Boscov's Inc. and Steve & Barry's LLC have all filed for bankruptcy protection during the past six months.

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Elaine Misonzhnik

Senior associate editor Elaine Misonzhnik has been writing for National Real Estate Investor since June 2006 and has covered commercial real estate for more than 12 years. She first became...
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