Trepp's Q3 Data Review on Commercial Real Estate Offers 9 Articles

By: Eddy Goldberg
Published: November 17th, 2022

One good way to keep current with commercial real estate trends is Trepp’s Quarterly Data Review. The 28-page Fall Review (Q3) edition contains 9 articles, listed below with brief descriptions of each directly from the report. To read or download the full articles, click here.

• Choppy 3rd Quarter Leaves Uncertainty for Economy, Commercial Real Estate
  Inflation, rising U.S. Treasury rates, and a U.K. budget proposal that called for unfunded tax cuts highlighted a chaotic third quarter. The fourth quarter may prove just as tumultuous.

• CMBS Delinquency Volume Continues to Decline, But Not Evenly
  The volume of loans that are more than 30 days late with their payments dropped in September to $17.86 billion, nearly 38% less than a year ago and nearly 60% less than December 2020.

• CMBS Loans with Low Coverage Face Greater Risk of Loss as Rates Climb
  At least 160 office and retail loans securitized through CMBS conduit deals mature through the end of 2023 and have DSCRs of less than 1.0x. They’ll likely suffer losses.

• KKR Tops Ranking of CMBS Conduit B-Piece Buyers, Risk Retainers Through September
  KKR Real Estate Credit Opportunity bought the B-pieces of four CMBS conduit deals totaling $3.49 billion through September. It also took down the most junior classes of two conduit deals.

• CMBS Special Servicing Volume Increases for Second Month in a Row
  The volume had inched up in September to $30.33 billion, from $29.91 billion the previous month, according to Trepp. But it remains down sharply from $52.95 billion at the end of 2020.

• CMBS Loan Resolutions Suffer 47.32% of Losses
  A total of 10,947 CMBS loans with a balance of $125.86 billion have been resolved with losses since 2010. They’ve suffered $59.56 billion of losses, for a 47.32% loss severity.

• CMBS Issuance in 3Q Plunges 35% to $13.3 Billion
  A total of $13.3 billion of deals priced during the third quarter, down from the $21.68 billion that priced a year earlier. So far this year, issuance was $63.28 billion, 6.7% lower than last year’s volume.

• Life Cos.’ Commercial Mortgage Returns Stay in Negative Territory
  Commercial mortgages held by life insurance companies generated a negative 3.55% return during the second quarter, putting the Trepp LifeComps Total Return Index at a negative 8.26% return for the year.

• Apartment Property Cash Flow Increased Unevenly in 2021
  Apartment properties backing CMBS loans saw a 1.76% overall increase in net cash flow between 2021 and 2020. But that increase was minimized by the cash-flow declines in a handful of states with large urban areas.

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