10.12.15: Will Flooding Affect CMBS Conduit Loans in South Carolina?

About $5.62 billion of loans in commercial mortgage-backed securities (CMBS) could be adversely affected by recent record flooding in South Carolina. President Obama declared a state of emergency covering the entire state and ordered federal aid to help the recovery, according Morningstar Credit Ratings.

The top five metropolitan statistical areas (MSAs) — Charleston; Columbia; Greenville-Mauldin-Easley; Myrtle Beach-Conway-North Myrtle Beach; and Hilton Head Island-Beaufort — account for roughly 75% of the state’s total CMBS exposure. The top two, Charleston and Columbia, represent nearly 45% combined.

According to the National Weather Service, the hardest-hit swath of South Carolina stretches from the capital of Columbia, in the middle of the state, all the way to the coast, from Georgetown south to Charleston.

The agency also reported that Columbia received more than 7 inches of rain overnight on October 3-4, while North Myrtle Beach accumulated more than 15 inches of water in the past few days, and Charleston received 11.5 inches of rain on Saturday, October 3, making it the wettest day on record for the city.

The Coastal Grand Mall in Myrtle Beach is the largest CMBS loan in South Carolina at $123.6 million and roughly 11.6% of the GS 2014-G24 CMBS deal. The mall’s website states that it was open with regular hours on October 6. Three retail properties in the Charleston-North Charleston MSA and a Marriott on Hilton Head Island, all of which were reported as open for business, round out the five largest CMBS loans in South Carolina.

Morningstar said it had not yet received any reports of damage to any individual CMBS properties, but the company added that it will monitor these loans closely.

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This entry was posted in CMBS, CMBS Securities, Commercial Mortgage-Backed Securities, Michael D. Sneden, News & Recent Closings, The Banker's Mortgage Conduit, Valuexpress and tagged , , , . Bookmark the permalink.

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