Hurricane Florence damage toll could include nearly $1.5B of mortgages

Multifamily properties account for almost one-third of the exposure

TRD NATIONAL /
Sep.September 20, 2018 02:00 PM

Flooded North Carolina homes (Credit: Getty Images)

Hurricane Florence-related damages could impact $1.49 billion worth of securitized commercial mortgages, according to a report from Morningstar Credit Ratings.

The storm has been devastating North Carolina with flooding and record-breaking rainfall, and Morningstar found 189 properties backing 187 securitized loans in counties designated as disaster areas by the Federal Emergency Management Agency. The state’s Cumberland and New Hanover Counties had the most exposure at $1.05 billion.

Freddie Mac deals on multifamily properties account for 32.8 percent of the total exposure.

Morningstar does not expect a wave of loan defaults to stem from the storm, as business-interruption insurance should be able to cover any gaps in service that may arise for most properties.

However, flood damage could still prevent the refinancing of some existing loans and jeopardize the payoff of about $51.5 million in securitized loans due to mature over the next year.

Morningstar’s securitized commercial mortgage estimate for Hurricane Florence is much smaller than its estimate for securitized commercial mortgages after Hurricane Irma, when it projected that $26.6 billion worth of them were at risk.

Analysts said the storm will likely impact home sales and construction in the coming months, and it could lead to a rise in flood insurance prices as well. An undersupply of apartments in the small cities that Florence has hit could make it especially challenging to relocate residents displaced by the storm.


Related Articles

arrow_forward_ios
Marwan Kheireddine (inset), Jennifer Lawrence and 400 East 67th Street (Getty, Compass, BDL Accelerate)

Jennifer Lawrence’s Upper East Side PH sold at 37% loss

Jennifer Lawrence’s Upper East Side PH sold at 37% loss
Senate Minority Leader Chuck Schumer and Senate Majority Leader Mitch McConnell (Schumer by Tasos Katopodis/Getty Images; McConnell by Ting Shen/Xinhua via Getty)

Schumer v. McConnell on SALT: Who’s gonna give?

Schumer v. McConnell on SALT: Who’s gonna give?
111 Leroy Street and 817 Fifth Avenue (StreetEasy, Google Maps)

Luxury deals plummet in Manhattan — again

Luxury deals plummet in Manhattan — again
From left: Jared Kushner, 715 Park Avenue, Deutsche Bank CEO Christian Sewing, and Rosemary Vrablic (Credits: Kushner by BRENDAN SMIALOWSKI/AFP via Getty Images; 715 Park via Google Maps; Sewing by by Thomas Lohnes/Getty Images; Vrablic by PAUL LAURIE/Patrick McMullan via Getty Images)

Apartment sale to banker for Trump and Kushner probed

Apartment sale to banker for Trump and Kushner probed
Renderings of 17 Jane Street and Edward J. Minskoff (Renderings via Kristen Krajewski; Minksoff by Patrick McMullan/Patrick McMullan via Getty Images)

Minskoff sells first condo in West Village project for $22M

Minskoff sells first condo in West Village project for $22M
Central Park South saw its median sales price for condos nosedive to $1.5 million (iStock, photo by Gary Hershorn/Getty Images)

Here’s where Covid hit Manhattan condo market hardest

Here’s where Covid hit Manhattan condo market hardest
Corcoran Group CEO Pam Liebman (Photography by Sasha Maslov)

Corcoran absorbs Contra Costa brokerage in NorCal

Corcoran absorbs Contra Costa brokerage in NorCal
641 Fifth Avenue and 32 East 64th Street with Jeff Zucker (Google Maps; Getty)

Best week since March for Manhattan luxury market

Best week since March for Manhattan luxury market
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...