JULY 21, 2014

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$7.7b in CMBS loans liquidated in 2014, losses average 49%

by Reg Clodfelter

Some 431 CMBS loans worth a combined $7.7 billion have been liquidated with losses during the first five months of 2014, with losses averaging 49.32 percent, according to the latest report from Trepp. Most of the activity — nearly 70 percent — occurred in February and March through a bulk sale by CWCapital Asset Management.

The average losses in 2014 have been nearly 550 basis points greater than the 43.88 average loss severity for all liquidated loans since the beginning of 2010. The lodging sector had both the fewest loans and the worst losses, with 28 loans worth more than $820 million suffering an average loss severity of 55.58 percent. The lodging sector’s struggles were closely followed by the retail sector, which has seen 150 loans worth nearly $1.8 billion liquidated in 2014 at an average loss of 52.94 percent.

Industrial sector loans

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