The cost to defease a CMBS loan has gotten more expensive due to Brexit uncertainty and a flight to quality. Since most CMBS loans being defeased now are maturing within a couple of years, the cost is more correlated with short-term yields. As yields rise the cost to defease is cheaper, however as they drop the cost increases.
As an example, the yield on the 2 Year Note has dropped from 91 basis points at the beginning of June to 58 basis points at the end of June. Thus, many borrowers are being surprised at the jump in the cost over the past week.
If you are curious how recent yield movements have impacted defeasance costs, you can use our calculator to generate a good estimate. You can also send us specific loan terms and we can provide you with a tighter number.