Special servicers have been able to handle more CMBS loan resolutions each year since 2009, and Fitch Ratings expects that trend to continue throughout 2012. At the same time, loss severities appear to be on the wane after hitting a high water mark of 45%, the ratings agency said in its annual US CMBS Loss Study issued earlier this week.
Throughout 2011, loss severities actually declined in most major property types, aside from hotels, where severities rose to 55.4%, coming in second behind retail with 56.4%. Looking ahead, Fitch has a wary eye on office, currently the only CMBS asset type that it’s assigned a negative outlook. "Office loans and properties along with tertiary markets are Fitch’s chief concerns with respect to loss severities in 2012,” says senior director Adam Fox in a release.
It’s increased volume driving the trend toward stabilization in loss severities. The number of resolved Fitch-rated CMBS loans climbed nearly 14% in ’11, for 1,620 loans totaling $19.6 billion, including 951 mostly smaller-balance loans disposed of with losses. In the prior year, it was 1,427 loans totaling $19.4 billion. Going in the opposite direction are loan modifications granted by special servicers: 244 Fitch-rated loans representing $6.1 billion modified last year, compared with 343 loans representing $10.8 billion in 2010.
Read more...GlobeSt.com - CMBS Resolutions Seen Rising as Losses Start Declining - Daily News Article
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