Orange County Office Buildings Hit CMBS Watchlist

In the ailing office sector, many owners face the expiration of low-rate loans securing assets that are now struggling operationally. If lenders are unwilling to extend term lengths, owners of underwater assets may need to kick in additional capital upon refinancing to satisfy minimum loan-to-value requirements. Although commercial mortgage-backed securities, CMBS loans, represent a minority of loans securing commercial real estate, they can act as a barometer for the broader investment market and trigger asset turnover upon expiration.