During the most recent quarter, investor in securities backed by commercial real estate loans suffered the first deterioration in losses since last year.
Second-quarter weighted-average loss severity was 41.5 percent on all liquidated U.S. CRE loans included in commercial mortgage-backed securities.
The CMBS loss severity level worsened from the first quarter of this year, when the rate was 40.7 percent.
The findings were outlined in US CMBS Loss Severities, Q2 2013 Update, from Moody’s Investors Service.
The New York-based ratings agency said that it was the first quarterly increase since the third-quarter 2012
At 48.6 percent, retail properties had the worst weighted-average loss severity of any property type.
Self-storage loans had the lowest rate: 33.2 percent.
Loss severities for the 2006 vintage were 50.3 percent, higher than any other vintage. The 2008 vintage had a 46.9 percent rate.
“We expect cumulative realized loss rates will continue to rise because of the significant share of recent vintage loans currently in special servicing,” Moody’s Senior Credit Officer Keith Banhazl said in the report. “We expect cumulative loss severities to remain near current levels although quarterly fluctuations will persist.”
