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Losses on CMBS Loans Increase in January

January saw $834.0 million in CMBS loans resolved at a loss, with $382.3 million in losses total, carrying an average loss severity of 45.84% for the month, reported Trepp. This was an increase in loan loss volume from December 2023, where losses totaled $132.9 million, although December’s loss severity was greater.

The 12-month average disposed balance moved to $247.6 million in January, compared to the $193.4 million that was seen in December, while the 12-month moving average loss severity stood at 52.66% in January, slightly down from the 54.20% seen in the prior month.

Trepp reported the largest loan to resolve at a loss in January was the $447.6-million Veritas Multifamily Portfolio Pool loan. The loan is collateralized by more than 60 multifamily properties in the San Francisco area. The bulk of the properties were constructed in the early 1900s, although one was built in 1890 and another as late as 1976.

In all, just under $3 billion of CMBS loans have been resolved at a loss over the past 12 months with a total of $1.56 billion in losses, according to Trepp.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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