By a News Reporter-Staff News Editor at Real Estate Weekly News -- Kroll Bond Rating Agency released its 2014 outlook for the CMBS market. The report highlights this year's post-crisis issuance record, which was up almost 70% over 2012. In many ways, the wind was at the sector's back, as the economy continued to gain traction and commercial real estate (CRE) property fundamentals held their ground or improved in many markets. There was also an increasing appetite for CMBS securities on behalf of a growing investor base. Perhaps the biggest beneficiaries of the expansion were borrowers. As demand for CMBS increased, so did competition among the loan originators, and we observed a loosening of credit standards along with lending on some not so conventional property types. All told, the year ended with the weakest credit metrics we have observed post crisis, including higher leverage and lower debt service coverage. As we approach 2014, all economic signs point to moderate growth, which should support positive trends in CRE credit fundamentals, highlighted further below. The US Gross Domestic Product (GDP) grew at an annual rate of 3.6% in Q3 2013 and is expected to grow on average 2.6% in 2014, according to Bloomberg's Economists' survey. Job growth has also been a bright spot, as evidenced by the decline in US unemployment to 7.0% in November from 7.9% in January of this year. Nonetheless, uncertainty heading into the new year surrounding regulations and policy decisions may have a stranglehold on interest rates and economic growth to some extent. Absent these disruptions, we expect 2014 to be a positive one for commercial real estate and CMBS issuance. To view the report, please visit www.kbra.com . Keywords for this news article include: Real Estate, Kroll Bond Rating Agency . Our reports deliver fact-based news of research and discoveries from around the world. Copyright 2014, NewsRx LLC
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