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CMBS Loss Severity Hits Lowest Level in Nine Months
CMBS liquidation volume fell in February 2018, as average loss severity remained at a low level. Last month, 29 loans totaling $377.3 million paid off with losses, with the average loan size clocking in at $13 million, according to a report by Trepp.
The 29 loans were resolved with an average loss severity of 32.5%, down from 35% in January, and considerably lower than the six-month moving average of 47.19%.
Trepp notes, although the office sector posted the highest average loss severity, the retail sector registered the largest realized loss total last month. There was an aggregate $66.8 million in retail loan losses, the bulk of which came from the write-down of the $59.9 million Chesapeake Square note, reports Trepp. That loan’s loss amount accounts for more than 50% of the aggregate realized loss tied to all disposals in February.
Realized losses from the office sector totaled $45.4 million, most of which was also tied to one loan, the $25.6 million 3 Gannett Drive loan which was resolved with a 101% loss, according to Trepp research.
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