JPMorgan Chase sold $500 million in mortgage bonds last week in the previously dormant secondary market for commercial mortgage-backed securities (CMBS).

The New York-based lender’s issue represents only the third successful CMBS deal since mid-2008. It was met with strong investor demand and sold without support from the Federal Reserve’s Term Asset-Backed Securities Loan Facility (TALF), even though the offering was eligible for government backing – all factors that bode extremely well for the future of the securitization market, whose revival could bring much-needed liquidity to the troubled commercial real estate sector.

According to Reuters, JPMorgan’s CMBS offering drew more orders than could be filled at the proposed prices.

The securities package was considered a well underwritten, “conservative” issue, backed by 55 retail properties from Inland Western Real Estate Trust Inc..

Bloomberg News explained that the largest top-rated portion of JPMorgan’s five-part offering priced to yield 2.05 percentage points more than benchmark interest rates.

The rebirth of the CMBS market began with the successful trade of $400 million in debt underwritten by Goldman Sachs and backed by 28 retail shopping centers from Developers Diversified Realty Corp. just four weeks ago, which tapped TALF to fund less than a quarter of the purchase.

This initial deal garnered strong investor appetite, and Bank of America quickly followed suit with its own $460 million offering backed by a single, fixed-rate loan to hedge fund manager Fortress Investment Group LLC, and secured by 44 office and industrial properties in Florida, as well as a railway corridor. BofA’s deal sold without any government backing from TALF.

Mark Heschmeyer, with commercial real estate marketer CoStar Group, explained that all of the three new bond issues have involved single borrower entities, which have not typically characterized the bulk of CMBS deals in the past. Heschmeyer says Standard & Poor’s expects single-borrower deals to become the standard for future CMBS offerings.