Sales of CMBS Plunge 85% as Commercial Property Markets Freeze

Sales of commercial mortgage bonds have fallen off a cliff, plummeting about 85% year-over-year, as rising interest rates cut into lending volume and defaults spook investors.

Only about $4.27 billion of the bonds have been issued so far this year, down from $29.38 billion at this same point last year, according to data compiled by Bloomberg based on deals without government backing. Investors blame the Federal Reserve’s aggressive interest rate campaign, which has made it more expensive for borrowers to refinance. Higher rates have also cut into sales of properties by effectively lifting prices for buyers.

Adding pressure is ...