Although Hurricane Charley wreaked havoc in the Gulf coastal regions of Florida, it has done minimal damage to properties secured in CMBS deals, analysts said.
"In general, we find that the CMBS exposure to Hurricane Charley's damag was minimal, but there are a few deals that may bear watching," said Merrill Lynch analysts.
Although there's really no reliable way to estimate Charley's impact on specific underlying properties backing CMBS transactions, Merrill performed a preliminary analysis, looking for CMBS loans based within Florida's Charlotte and Lee Counties, which were most affected by the hurricane. The analysis indicated that these two counties combined only have roughly 3% of all the Florida properties secured by CMBS. Fortunately, in this instance, greater than one-third of all Florida properties backing CMBS are found in Miami-Dade and Broward counties, which did not really suffer any significant damage.
Based on information that's available, there are 113 loans in 90 CMBS transactions with properties found in Charlotte or Lee County, with a $655 million total outstanding balance. Merrill cited the JPMCC 2003-FL1 deal that is partly backed by a $40 million loan (comprising 12% of the deal) secured by retail center Bell Tower Shops, located in Fort Myers. Merrill analysts called Bell Tower last Monday and found that some store locations were open for reduced hours to restock inventory that had water damage. However, stores were back to regular hours by Tuesday.
The largest dollar exposure found by analysts was a $53 million loan in the Port Charlotte Town Center, which makes up above 4.5% of CSFB 2001-CP4. As of last Tuesday, Merrill reports that the retail center remained closed, with most of the phone lines down, making estimates of the damage impossible.
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