Of the 541 CMBS transactions that S&P currently monitors, just 58 contain some exposure to the BRAC proposal. Of these transactions, only a handful have been identified that could be subject to rating actions. This reflects the small percentage of DoD leases in any individual transaction and the dispersion of affected DoD properties across S&P rated CMBS. In total, the $574.2 million of affected CMBS represents approximately 0.2% of S&P outstanding rated CMBS.

S&P recently completed a review of the impact that BRAC recommendations could have on its rated commercial mortgage-backed securities. The BRAC proposal calls for the closure and realignment of several major military bases across the country, and also includes a list of leased office buildings that the DoD plans to vacate. Historically, 85% of the BRAC's recommended base closures or realignments have become law.

The proposal also identified 102 office properties that may be subject to lease reductions. Of those, 81 are located in Virginia; Maryland has the next highest number with six, while the remaining 15 properties are located across 12 different states. Local multifamily would typically be hurt most by a base closure, as 70% of the military personnel, on average, are housed off-base. The retail sector could also be adversely affected due to the loss of local nongovernmental jobs in industries that provide goods or services to the bases or to the households of installation employees. Other property types, such as lodging and self-storage, may also be subject to residual consequences but were excluded in this review, as the effect would likely be minimal.