Commercial mortgage backed securities grew in profitability for the ninth straight year in 2019, according to a new report from Fitch Ratings, but that streak is bound to come to an end in 2020 because of the widespread impacts of the coronavirus crisis.
The property-level net operating income for loans securitized in Fitch-ranked CMBS grew an average of 2.0% in the last calendar year, following growth rates of 1.9% in 2018 and 2.0% in 2017. Yet ominous signs were already on the horizon for the hotel sector, where NOI began a decline in 2019, and retail, where growth was close to zero.
Hotels saw their NOI dip by 3.1% last year, following a 0.2% decline in 2018. But they were an outlier in a larger universe that saw 60% of properties that reported financials in both 2018 and 2019 increase NOI.
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