Fitch: Retail, Hotels Top CMBS Losses

The total loss on about 30,000 commercial mortgage-backed securities loans studied by Fitch Ratings is $305.7 million, the rating agency reports, with retail and hotel property-backed loans experiencing almost 79% of all losses in dollar terms.Fitch is forecasting a CMBS loan delinquency rate of 2% by year-end, and additional CMBS losses of $400 million. Retail loans had a loss severity of 46.6%, making up more than 48% of the total balance of all losses, but they account for only 29% of the CMBS loans studied. Mary O'Rourke, a senior director at Fitch, noted that the hotel sector is also seeing a "disproportionate share of losses," with hotel loans making up less than 10% of CMBS collateral, but contributing almost 30% to losses. The average loss severity for all sorts of loans -- the Fitch study also includes office, multifamily, and industrial properties -- is 33.3%. Liquidations of real-estate-owned properties resulted in the highest loss severities, while the approximately 40% of the loans with losses that were resolved by discounted payoffs resulted in "much lower" average loss severities, the rating agency said.