Investors Scoop Up Office CMBS Even With Some Towers Empty
- Commercial mortgage-bond market scoops up office-backed deals
- U.S. vacancy rate expected to set new high: Moody’s Analytics
Photographer: Drew Angerer/Getty Images
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The success of remote working during the pandemic has prompted many to wonder if it could mean the death knell for office-tower demand in urban centers. But so far this month, the commercial mortgage-backed securities market is signaling it’s not worried.
Investors devoured a series of commercial mortgage bonds in recent days that were backed by so-called “Class A” office towers -- the highest quality structures in the best locations. The offerings featured or included new high-profile office properties or existing towers with strong tenants in place. Demand for some of the bonds was so strong that certain tranches were oversubscribed, and risk premiums tightened upon pricing.