The volume of commercial mortgage-backed securities (CMBS) conduit loans liquidated in December retreated sharply, dropping 51% from November's reading, according to new data from Trepp LLC. This is the highest total since Trepp began tracking this activity in January 2010.
At $1.04 billion, liquidations were about 80% of the 12-month moving average of $1.3 billion per month. Since the beginning of 2010, the special servicers have been liquidating at an average rate of about $1.07 billion per month.
The November liquidations came from 122 loans. That compares to 218 loans that were liquidated in November. The 12-month moving average is 154 loans per month, while the average loan size for liquidated loans was $8.5 million in December. Over the last 12 months, the average size of liquidated loans has also been $8.5 million.
As noted, there were 122 loans liquidated in December. The losses from the December liquidations were almost $518 million – representing an average loss severity of 49.86%. This was down 147 basis points from November's 51.33% reading.
The December loss severity reading is well above the average loss severity of 43.7% over the last 24 months, and also well in excess of the 12-month rolling average of 42.8%.