2001 CMBS ISSUANCE VOLUME POISED TO BREAK RECORD.

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ACCORDING TO A JULY REPORT BY NEW York-based Moody's Investors Service, CMBS 2Q Review: "Offenders" Rise as Property Owners Refinance VS Sell, global CMBS issuance is off to a strong start in 2001, with first-half volume of $41 billion topping last year's first half by about $13 billion, or 45 percent. With interest rates expected to remain at attractive levels for the remainder of the year, volume should continue to be strong, according to Moody's. In light of these factors, Moody's has revised its U.S. forecast for 2001 upward to $65 billion from $52 billion, while maintaining its international forecast of $20 billion. The combined U.S. and international total of $85 billion, if achieved, would make this the biggest CMBS issuance year on record. The previous high of $78 billion in 1998 was driven largely by U.S. volume; if achieved, the new record would be noteworthy for the substantial contribution from international, according to the Moody's report. The continued weakness of the U.S. economy has begun to spill over to the demand side of commercial real estate, with the asset classes most directly affected being...

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