he economic impact of the Coronavirus outbreak is all but certain to be felt by CMBS investors. The only real uncertainty surrounds when missed rent payments will begin, what industries are likely to feel them most acutely, and—more to the point—how your portfolio aligns with these eventualities.
The dashboard below—created using RS Edge and Tableau—displays a stylized example compiling small random excerpts from several CMBS portfolios. While business disruptions have not (yet) lasted long enough to be reflected in CMBS default rates, visualizing portfolios in this way provides a powerful tool for zeroing in on where problems are most likely to emerge.
The maps at the top of the dashboard juxtapose the portfolio’s geographic concentration with states where COVID-19 prevalence is highest. Investors are able to drill down not only into individual states but into individual NAICS-defined industries that the loans in their deals cover.
At each level of analysis (overall, by state, or by industry) the dashboard not only reports total exposure in UPB but also important risk metrics around the portfolio’s DSCR and LTV, thus enabling investors to quickly visualize how much cushion the underlying loans have to absorb missed rent payments before the deals begin to experience losses.
The real value of visualizations like these, of course, is the limitlessness of their flexibility and their applicability to any market sector.
We sincerely desire to be helpful during these unprecedented market conditions. Our teams are actively helping clients to manage through them. Whether you are looking for historical context, market analysis or just a conversation with folks who have been through several market cycles, we are here to provide support. Please contact us to talk about what we can do for you.
