Monday, December 9, 2013

Trepp Reports US CMBS Loss Severity Up in November




NEW YORK, NY – Trepp Reports November Loss Analysis: Volume and Loss Severity Bounce Back

“November CMBS loss severity landed at 48.10%, up considerably from October's 38.58% and above the 12-month moving average of 44.34%,” said Joe McBride, a senior analyst with Trepp.

Joe McBride
“The number of loans liquidated was 105, resulting in $579.64 million in losses and an average disposed balance of $11.48 million, in line with the 12-month average of $11.43 million.

“Office and retail properties accounted for the majority of liquidated loans and pushed loss severity up with average loss rates of 68.47% and 51.26% respectively.”

After two months of relatively low liquidation volume, November brought a return to average levels.

Liquidation volume came in at $1.2 billion in November, up from $960 million in October and $870 million in September. Volume registered on par with the 12-month moving average of $1.18 billion.

Further, the majority of loans liquidated fell into the greater than 2% loss severity category.

November loss severity landed at 48.10%, up considerably from October's 38.58% and above the 12-month moving average of 44.34%.

The number of loans liquidated in November was 105, resulting in $579.64 million in losses. These liquidations translated to an average disposed balance of $11.48 million, in line with the 12-month average of $11.43 million.

Since January 2010, servicers have been liquidating at an average rate of $1.17 billion per month.

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