December 14, 2016 Comments Off on Trouble for Houston CMBS Loans Views: 169 National News, Southwest, Texas

Trouble for Houston CMBS Loans

Low oil prices mean trouble for energy companies — and trouble for office properties that rent space to those companies. Several giant loans backed by Houston office buildings may default, according to November’s “Watchlist” report from a Morningstar Credit Ratings, which rates bonds, including commercial mortgage-backed securities (CMBS).

Morningstar added seven loans to properties in Houston totaling $263.5 million to its Watchlist, based on factors like low-occupancy rates, upcoming lease expirations or large amounts of debt.

Houston’s economy is now more diverse than it has been in prior economic downturns for Houston — and that has helped prevent a commercial real estate bust, according to analysis in the Houston Chronicle. “It’s probably bottomed out,” said Morningstar Vice President Steven Jellinek.

Read more at the Houston Chronicle

Connect with Morningstar’s Jellinek

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