CMBS Losses in 3Q Beyond Historical WA Loss Severity (CRE Bubbles??)
This story from Bloomberg reminds me of the Don Ho song ‘Tiny Bubbles.’But it may be more like BIG bubbles … in commercial real estate.
(Bloomberg) – U. S. CMBS losses jumped ‘well beyond’ the historical weighted average (WA) loss severity in 3Q16, Moody’s said in a press release.
WA loss severity increased to 52% for loans liquidated during the quarter from 41.3% in the prior quarter, and above historical WA of 42.9% for loans liquidated between Jan. 1, 2000 and Sept. 30, 2016.
‘Two notable large loan liquidations contributed to this increase – HSBC Center, from the 2005 vintage, which liquidated with a loss of $79.7m for a loss severity of 108.7% and Chapel Hill Mall, from 2006, which liquidated with a loss of $65.2m for a loss severity of 100.0%,’ Keith Banhazl, Moody’s associate managing director, said
This post was published at Examiner on November 21, 2016.