CMBS Loan Loss Volume Declines in February; Loss Severity Increases

CMBS Loan Loss Volume Declines in February; Loss Severity Increases

February 2025 saw $79.7 million across 14 CMBS loans resolved with $38.2 million in total losses, with an average loss severity of 47.87%, reported Trepp. This was a significant pullback in loan loss volume from January, when the volume of losses was $246.9 million.

However, Trepp reported an increase in loan loss severity for loans resolved in February compared to the previous month. The severity for loans with losses greater than 2% rose to 79.68% from 67.63% in January. The running average loss severity for losses greater than 2% for the past 12 months was 65.15%, which is slightly higher than the 12-month moving average one month prior

The 12-month moving average monthly disposed balance decreased to $199.3 million in January, down from the $204.4 million the month prior. The 12-month moving average loss severity retreated to 61.96%, down from the 62.65% recorded as of January.  

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