Healthcare Property Loans Worst CMBS Performers

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MORTGAGE EXPERT
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When it comes to losses on commercial real estate loans that are securitized, mortgages to finance health care properties take the gold and silver medals.

Loans owned by commercial mortgage-backed securities and secured by health care properties had a 57.4 percent weighted-average loss severity in the second quarter.

That was the worst level of loss severity out of all CMBS loan types during the three month period that ended on June 30.

Moody’s Investors Service reported the performance data.

The New York-based ratings agency highlighted the Senior Living Properties Portfolio in GMACC 1998-C1 — which liquidated with a $118 million loss and 105 percent loss severity. Moody’s Senior Vice President Keith Banhazl noted that the Senior Living loss was the seventh-largest dollar amount to date.

Moody’s further highlighted potential losses of 21 percent on GSMS 2007-GG10 and expected losses of 27 percent on JPMCC 2008-C2. Two loans with the largest losses ever were from this pair of transactions.

On of those loans was Two California Plaza, which was originally securitized as part of the GSMS deal. It liquidated with a $204 million loss and a loss severity of 43.5 percent at the time of final disposition. This was the largest loan loss to date.

In addition, the Promenade Shops at Dos Lagos, in the JPMCC transaction, liquidated with a $135 million loss — the second-biggest ever — and a loss severity of 109.2 percent.

“The 2006 and 2008 vintages continue to have the highest cumulative realized loss rates at 5.9 percent and 5.1 percent, respectively,” the report stated.

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Mortgage Daily Staff

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