For Property-Backed Securities, Rita May Be Worse Than Katrina

Article by Christine Haughney Via The RealEstate Journal

Hurricane Rita threatens to do more damage to publicly traded real-estate markets than Katrina.

Standard & Poor's estimates about three times as much commerical-mortgage-backed securities could be affected by the storm than were affected by Katrina. CMBS are created by securitizing loans on offices, malls and other commerical properties.

In Houston alone, some 2,000 properties valued at about $11 billion are packaged in such bonds, according to analytics firm Trepp LLC -- roughly 2.4% of the overall CMBS market. Across Louisiana, Mississippi and Alabama, about 1,100 properties in 345 deals were affected by Katrina.

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