Commercial real estate loan resolutions and loss severities continued to rebound from relatively low levels in the first quarter of the year, according to new data from Trepp LLC.
Trepp reports that February and March saw losses well below the 12-month moving average of 43.8%, while April and May loss severities were at 42.68% and 43.87%, respectively. At $1.64 billion, liquidations were about 23% higher than the 12-month moving average of $1.33 billion per month; liquidations were up 15% month-over-month in May and 85% from the 12-month low seen in February.
Since the beginning of 2010, special servicers have been liquidating at an average rate of about $1.11 billion per month, Trepp says. The number of commercial mortgage-backed securities conduit loans liquidated in May was 164, up 11% from April, and the average loan size for liquidated loans was $10.05 million in May.
Trepp adds that the May loss severity reading is slightly above the average loss severity of 42.62% over the last 29 months, and slightly higher than the 12-month rolling average of 43.87%.