Goldman, Citigroup Set to Sell Commercial Mortgage Real Estate Securities

Goldman Sachs Group Inc. and Citigroup Inc. plan to sell $788.5 million of bonds backed by commercial mortgages, according to a person familiar with the offering.

The issue contains debt on 48 properties, said the person who declined to be identified because terms aren’t public. Retail account for 78.2 percent of the pool and offices make up 10.4 percent, the person said.

The offering comes as Wall Street works to revive the $700 billion market after sales tumbled 95 percent to $11.2 billion in 2008, choking off funds to borrowers. Banks arranged $3.4 billion of the securities last year, and about $1.7 billion has been sold in 2010, according to data compiled by Bloomberg.

The current offering marks the third sale to pool commercial mortgages from multiple borrowers this year, Bloomberg data show. JPMorgan Chase & Co. was the most recent issuer, with a $716.3 million offering on June 11.

Borrowers are struggling to secure enough financing to pay off maturing mortgages amid tighter underwriting standards and property prices down 39 percent from 2007 peaks, according to Moody’s Investors Service.

To contact the reporter on this story: Sarah Mulholland in New York at smulholland3@bloomberg.net

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