Trepp pegs Florida securitized CRE exposure to Hurricane Isaias at $3.27B
Multifamily is 68.8% of gross balances and five Panhandle counties hold more than half, though Trepp says the extent of damage is unknown.
At a glance
Trepp's initial analysis identifies $3.27 billion in gross securitized commercial real estate debt exposure across the Florida counties tied to Hurricane Isaias, with multifamily accounting for 68.8% of the reported balance.
Gross balances double-count 23 Freddie Mac records that sit in both a Multifamily Structured Credit Risk pool and a Freddie Mac agency CMBS pool.
By funding source, Freddie Mac-related records are $1.48 billion, or 45.4% of the gross balance and 39% of net.
Trepp's initial analysis identifies $3.27 billion in gross securitized commercial real estate debt exposure across the Florida counties tied to Hurricane Isaias, with multifamily accounting for 68.8% of the reported balance.
Hurricane Isaias made landfall near Destin on Friday, Oct. 9 as a Category 2 storm with maximum sustained winds of 105 mph, according to the Florida Division of Emergency Management. In the Oct. 14 screen, Trepp says the extent of any property damage and resulting credit stress remains uncertain. Trepp adds that property-level assessments, insurance recoveries and the pace of operational recovery will ultimately determine the impact on loan performance.
The screen covers outstanding, non-defeased debt across 306 property-level records in 15 counties, spanning private-label CMBS, CRE CLOs and Freddie Mac loan and reference-pool records. Trepp drew the geographic boundary from FEMA's designated-areas list for emergency declaration EM-3655-FL, and notes that a county's inclusion in that declaration does not establish that every property within it sustained damage. Five Gulf Coast Panhandle counties account for more than half of the total.
Gross balances double-count 23 Freddie Mac records that sit in both a Multifamily Structured Credit Risk pool and a Freddie Mac agency CMBS pool. Removing approximately $343 million of overlapping balances brings net exposure to $2.922 billion. One loan can appear in more than one pool before the overlap is stripped out.
By funding source, Freddie Mac-related records are $1.48 billion, or 45.4% of the gross balance and 39% of net. Private-label CMBS accounts for $1.37 billion, 41.9% of gross and 46.8% of net, and CRE CLOs contribute $414.3 million, 12.7% of gross and 14.2% of net. The two private-label categories together total $1.78 billion.
Multifamily and lodging carry the property-type risk
| Property type | Gross balance | Share of gross | Share of net |
|---|---|---|---|
| Multifamily | $2.25B | 68.8% | 65.1% |
| Lodging | $485.1M | 14.9% | 16.6% |
| Retail | $255.0M | 7.8% | 8.7% |
| Self-storage | $165.0M | 5.1% | 5.6% |
| Other property types | ~$113M | — | — |
Trepp says the multifamily recovery will be tracked through habitable rental units and lodging through the pace of hotel reopenings. Freddie Mac's multifamily delinquency rate reached a 20-year high of 0.64%, and MBA data put CMBS delinquency at 6.53% in early October. Neither figure reflects Isaias. What would move the Isaias tally is the property-level damage assessment that Trepp's initial screen, by its own description, cannot yet supply.
What would move the Isaias tally is the property-level damage assessment that Trepp's initial screen, by its own description, cannot yet supply.
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