About $4 billion in value was erased from 118 retail-anchored properties with CMBS debt after reappraisals. Bloomberg | Mar 01, 2021
(Bloomberg) U.S. mall values plunged an average 60% after appraisals in 2020, a sign of more pain to come for retail properties even as the economy emerges from pandemic-enforced lockdowns.
About $4 billion in value was erased from 118 retail-anchored properties with commercial mortgage-backed securities debt after reappraisals triggered by payment delinquencies, defaults or foreclosures, according to data compiled by Bloomberg.
That average drop which reflects the change in value since the debt was originated years ago may underestimate losses when the properties come up for sale because so much retail real estate is in distress. And few buyers are willing to take risks on aging shopping centers as e-commerce continues to grab market share.
KBRA Releases CREFC Day 1 & Day 2 Recap Kroll Bond Rating Agency (KBRA) releases its CREFC Day 1 & Day 2 Recap. CREFCs 22nd annual January conference started on Wednesday, January 20, 2021, albeit in an all-digital format due to the ongoing global pandemic. Whereas last years Miami conference drew close to 2,000 commercial real estate professionals, roughly 3,500 registered attendees and panelists assembled virtually. The Day 1 virtual sessions consisted of closed sessions by various CREFC forums. CREFCs Executive Director, Lisa Pendergast, commenced Day 2 of the conference with some thoughts about the state of the CRE industry, the year ahead, and the many important contributions that CREFC made to the industry in 2020 and will continue to make in 2021 and beyond.
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Kroll Bond Rating Agency (KBRA) releases a report on the acceleration in 2020 of Appraisal Reduction Amounts (ARAs), as well as our analysis of whether they are a good indicator for predicting CMBS loan losses.
ARAs, which serve to limit servicer advances, are also a key factor used to determine shifts in a securitization’s controlling class. KBRA recently reviewed ARAs across the CMBS 2.0 conduit universe, with some of the report’s key observations as follows:
409 ARAs have been effectuated year-to-date (YTD) through November 2020 on CMBS 2.0 conduit transactions. This is 3.7 times higher than the number (111) in full year (FY) 2019.