higher earnings. In 1996, however, the average return on investment of REITs soared to 31.1 percent, before dropping to 22.6 percent in 1997 (Rehak, 1998). New CMBS issues totaled $18.9 billion in 1995, down 6 percent from 1994. A good portion of the decline had to do with the run-up in rates at the end of 1994, which curtailed refinancing activity. A secondary factor was the continued decline of RTC issuance, which closed its doors at the end of 1995, after selling or closing 747 thrift institutions with assets of $452 billion.
Conduits are expected to generate at least $5.5 billion of this year's expected $20 billion of issuance (Frantz, 1996). That level is up from $1.2 billion in 1993 and $4.5 billion in 1995. While conduit volume is rising, the number of conduit originators has decreased from the frenzied pace of entry just a few years ago. "A common ingredient for most of the surviving conduit issuers is that they have a stake in their pools rather than simply collect fees and then disappear from
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