CorAmerica

Nassau Re Announces New Investment Strategies; Appoints Bruce Brittain and Russell Pemberton as Co-Managers of Nassau Private Credit

Hartford, CT, Feb. 12, 2019 – Nassau Re today announced that it is launching new investment strategies in its asset management segment, expanding into additional specialty finance asset classes as it grows third-party assets under management. With the creation of Nassau Private Credit LLC (NPC), Nassau Re will invest directly in collateralized loan obligation (CLO) equity and related investments for third-party institutional investors. In addition, under its Nassau CorAmerica brand, Nassau Re will expand its existing real estate commercial whole loan capabilities to include floating rate debt investments. Nassau Re is also expanding its alternative investments practice to grow its private equity investing and co-investment platforms.

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Alice EricsonNassau Re Announces New Investment Strategies; Appoints Bruce Brittain and Russell Pemberton as Co-Managers of Nassau Private Credit
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Commercial Real Estate Monthly Recap – Dec. 2018

Los Angeles – December 31, 2018 – Real estate fundamentals are generally healthy with vacancy rates across the four major property types below their historical average over the past 10 years, combined with above average rent growth. Multifamily and industrial property types have seen the most investment activity with sales in the marketplace over double their historical average. Secular changes have benefited the industrial sector with demand intensified from the growth of e-commerce. Given currently low vacancy rates and restrained new construction, CBRE projects an increase in net asking rents. Top of mind for many industrial stakeholders in the U.S. is the contentious international trade environment.

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Alice EricsonCommercial Real Estate Monthly Recap – Dec. 2018
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Commercial Real Estate Monthly Recap – Nov. 2018

Los Angeles – November 30, 2018 – Corporate bond spreads continued to widen with “A” rated coporate bonds increasing by 13 basis points in the month of November on top of an 11 basis point increase in the month of October. “AA-” rated CMBS bond spreads increased 10-12 basis points over the past month. Spreads for commercial mortgage loans (CML) tend to move more slowly and in a tighter range as compared to corporate bonds. Although not reflected at November month-end, CorAmerica’s estimate of CML spreads have been increased by 10 basis points commensurate with the current relative value to alternative investments. The change in CML spreads has been reflected in the CorAmerica weekly pricing matrix as of December 7th.

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Alice EricsonCommercial Real Estate Monthly Recap – Nov. 2018
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Commercial Real Estate Monthly Recap – Oct. 2018

Los Angeles – October 31, 2018 – Notable monthly movements in the market include an approximate .10%-.15% widening of spreads for agency loans (~.20% YOY) as well as “A” and “BBB” rated grade corporate bonds (~.22% YOY). The movement in agency spreads is likely due to heightened levels of the supply of bonds in the marketplace, both in Freddie K’s and DUS, while buyers are continuing to be more selective. Benchmark rates continued to widen with 1-month LIBOR up .07% (+.99% YOY), 10-year treausry up .08% (+.68% YOY), 30-year treasury up .16% (+.33% YOY). Upward movement in benchmark rates has been more pronounced over the last 12 months at the shorter end of the curve.

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Alice EricsonCommercial Real Estate Monthly Recap – Oct. 2018
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Commercial Real Estate Monthly Recap – Sept. 2018

Los Angeles – September 30, 2018 – The level of commercial/multifamily mortgage debt outstanding increased by $52.3 billion in the second quarter of 2018 as all four major investor groups increased their holdings. That is a 1.6 percent increase over the first quarter of 2018, according to MBA’s latest Commercial/Multifamily Mortgage Debt Outstanding report. Total commercial/multifamily debt outstanding rose to $3.27 trillion at the end of the second quarter. Multifamily mortgage debt outstanding rose to $1.3 trillion, an increase of $20 billion from the first quarter of 2018. The balance of mortgage debt on commercial and multifamily properties grew faster during the first half of 2018 than during any other first half since 2007. The four major investor groups all increased their holdings. Agency and GSE Portfolios saw the largest increase (2.4%), followed by life insurance companies (2.2%), banks and thrifts (1.9%), and CMBS, CS and other ABS issues (1.3%). Strong property fundamentals and values, coupled with still-low mortgage rates and strong loan performance, are all supporting the market.

Of note, there was an approximate 20 basis point increase this month in the 5, 7 and 10 year Treasury, which is significant. The change from one year ago is approximately 75 basis points. The recent interest rate movement may exert downward pressure on spreads in the short term as lenders compete aggressively for business to end the year.

Conduit issuance was light in September with only 3 deals pricing for a total of $3.24b, bringing the YTD conduit total to $28.57b across 31 deals. Two of the deals priced relatively close to one another, while the third deal priced wider based on perceived weaker sponsorship. AAA LCF priced from S+78-85, with two deals at 78 and one at 85. The AA- priced in a range of S+115-130, with the A- ranging from S+145-185. The SASB space was also quiet with only 4 deals pricing, all of which were floating rate and totaled only $1.288b. Additionally, 2 CRE CLOs priced for a total of $641mm.The real star of the show this month was the secondary market, which was particularly active this month as bonds traded both in comp and behind the scenes. We saw everything from AAA tranches down to below investment grade bonds trade, with all tranches ending the month tighter. AAA LCF bonds started to trade a little heavy in the last two days of the month after heavy selling leading into quarter end. Even with the month end widening though, they still managed to tighten around 5 bps on the month. AA- bonds ended the month tighter by 5-10bps, with A- bonds closer to 10-15bps tighter. BBB- bonds outperformed again this month, with spreads 20-30 basis points tighter.

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Alice EricsonCommercial Real Estate Monthly Recap – Sept. 2018
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