The Real Deal Miami

Appraisal losses could lead to CMBS pain

March 09, 2010 06:35PM

Losses attributed to commercial mortgage-backed securities may grow through 2010, according to the latest report from Trepp, a real estate tracking firm, due in part to the reduction in the appraised value of properties with associated loans. “Appraisal reduction is a forward-looking measure of potential future losses,” Paul Mancuso, a vice president with Trepp, said. Unfortunately for investors, many properties have seen significant losses to value over the last few years, which could be particularly rough on those properties whose loans were inked during the boom years. New York and Florida ranked high on the list of states most vulnerable for further CMBS pain, Trepp said.