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Loan resolutions and loss severities of commercial mortgage-backed securities continued to rebound in May from relatively low levels seen earlier in 2012.
Special servicers liquidated about $1.64 billion in loans, 23% higher than the 12-month moving average of $1.33 billion a month, according to analytics firm Trepp. Liquidations rose 20% from a year earlier and 15% month-over-month.
The number of CMBS loans liquidated in May totaled 164, up 11% from April and about 10% above the 12-month moving average of 149.
The losses from those liquidations came in at $723 million, representing an average loss severity of 43.87%, up from April's 42.68% reading and equal to the 12-month rolling average, according to Trepp.
The average liquidated loan size totaled $10.05 million in May. Over the last 12 months, the average size of liquidated loans has been $8.94 million. Since the start of 2010, special servicers liquidated about $1.11 billion in CMBS loans per month.
Click on the image below for a larger view of loan liquidation statistics, according to Trepp.
Eliminating loans with losses of less than 2%, the situation looks a little different.
“As we've noted before, we suspect that in many cases, the small-loss loans are actually refinancings that have taken place where the losses reflect small, unpaid special servicer fees or other costs,” Trepp analysts said.
On that basis, when taking out the small loss loans, about $1.3 billion in such loans were liquidated in May, compared to an average of $867 million over the last 29 months and $1.09 billion over the last 12 months.
The average loss severity on that basis is 55.5% for May, up from April's 51.95% and just above the monthly average 53.35% over the last 12 months, according to Trepp.
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