RPT-Fitch: Non-traditional properties increasing in U.S. CMBS

Mon Nov 11, 2013 9:06am EST

Nov 11 (Reuters) - (The following statement was released by the rating agency)

Traditional property types, including retail, office, multifamily, and industrial, continue to represent the majority of collateral in Fitch-rated U.S. CMBS, though there has been a steady increase in the number of non-traditional properties over the last four years, according to Fitch Ratings in its latest CMBS weekly newsletter.

Manufactured housing communities and self-storage properties in particular have increased of late.

The contribution of manufactured housing communities (MHC) to Fitch-rated CMBS deals has grown every year for the last three years. Representing less than 1% of deals in 2010, the asset class has grown slowly from 2.5% in 2011 to 3.2% in 2012 and 5.9% as of September 2013.

Self-storage assets have also been a growing contributor to deals in 2013 with just over 4% YTD. While not a traditional property type, these have also performed well with a less than 1% default rate. That said, Fitch still views self-storage assets cautiously seeing as many self-storage units are located in areas with limited barriers to entry.

While not necessarily non-traditional, lodging assets have also grown steadily over the last three years. Since 2010, when the hotel contribution was under 5% within Fitch-rated CMBS, the number of hotel assets grew as the market stabilized, to over 10% in 2011, 13.5% in 2012 and 14.5% YTD 2013.

Additional information is available in Fitch's weekly e-newsletter, 'U.S. CMBS Market Trends', which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter:

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