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Last year, when the owners of Worldwide Plaza, the 59-story office tower that takes up an entire block-front on the western edge of midtown, put the property on the market, bidders were unable to meet the $1 billion-plus asking price.
Fast-forward to last month, and those owners, a group that includes George Comfort & Sons and RCG Longview, raked in their cash another way. They took out an $875 million loan against the property.
The difference between then and now? Much of the credit goes to Wall Street's real estate debt-packaging machine that bundles up property loans and resells them to investors around the globe as commercial mortgage-backed securities. At its peak, that CMBS pipeline pumped hundreds of billions of dollars into the market annually, providing the financial rocket fuel that sent the volume of buildings changing hands and their pikes soaring into space - until both collapsed in the financial melt-down of 2008.
Back in gear
Now the mortgage-backed machinery is beginning to hit its stride again. In just the first two months of the year, CMBS issuance jumped to $19 billion - about four times the volume of last year's first quarter - filling the real estate market's tanks for what is already shaping up to be a busy year.
"Borrowers and sellers on both sides will have the confidence to enter into these larger acquisitions knowing the CMBS financing will be there," said Douglas Mazer, who co-heads Wells Fargo's CMBS lending group in Manhattan. "It's a key driver of sales, especially in New York, where we have...