Trepp Reports CMBS Loan Liquidation Hits 3-Year High as Loss Severity Drops

NEW YORK, NY, July 30, 2013 -- Trepp July Loss Analysis: Second Highest Monthly Volume; Loss Severity Falls

After a spike in loss severity last month, July saw a big jump in liquidated CMBS loan volume and a concurrent drop in loss severity. July brought the second highest liquidation volume since TreppWire started tracking the number in January of 2010.

July liquidations totaled $2.05 billion, relative to the 12-month moving average of $1.35 billion. The highest monthly liquidated volume was in November 2011 with $2.10 billion in liquidated loans.

While November 2011 recorded 218 loans with losses and July counted only 135, this month saw the highest average liquidated loan size. The average size of liquidated loans in July was $15.17 million, above June's $11.66 million and the highest monthly average since January 2010. July's loan count was also up from 107 in June.

The 135 loan liquidations resulted in $893.79 million in losses, translating to an average loss severity of 43.63%. July's loss severity was down from June's reading of 56.49% but above the 12-month moving average of 44.49%.

Since January 2010, servicers have been liquidating at an average rate of $1.19 billion per month.

  

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Eric@greatink.com