Public Storage 2009 Annual Report Download - page 14

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Declining property values and rising unemployment have severely constrained the issuance
of CMBS debt. CMBS issuance basically stopped in 2008 and 2009, and the outlook for
2010 is not much better.
Those who used CMBS debt when values were high and loan terms easy face a daunting
maturity schedule. As reflected in the following table, over the next five years, more than
$1 trillion of commercial mortgage debt is coming due. Many loans exceed underlying asset
values. In addition, the commercial banking industry recently reported the largest decline in
total loans outstanding in 67 years. According to the FDIC, the number of banks at risk of
failing hit a 16-year high. More than 5% of all loans were at least three months past due, the
highest level in the 26 years data has been collected.
$400
$300
$200
$100
$0
2010E 2011E 2012E 2013E 2014E
Commercial Real Estate Debt Maturities ($ billions)
2010 - 2014
$275 $297 $306 $309 $285
Over the next five years, more than $1 trillion of commercial mortgage debt is coming
due. Many loans exceed underlying asset values.
Source: Foresight Analytics LLP
$300
$250
$200
$150
$100
$50
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
CMBS Issuance ($ billions)
2000 - 2009
$52
$71
$54
$78 $94
$12 $2
$168 $203
$230
Source: Mortgage Bankers Association Q3 2009
Declining property values and rising unemployment have impacted the
issuance of CMBS debt in 2008 and 2009.