Bakken oil fields in North Dakota KBRA continues to project high losses for CMBS backed by energy-market properties in North Dakota. (Photo:

NEW YORK CITY—Oil prices were down about 70% to $30 per barrel in the spring of 2016, and Kroll Bond Rating Agency had identified 38 KBRA Loans of Concern (K-LOCs) among CMBS 2.0 tied to properties in energy-sector markets. What has changed? Crude is now trading at approximately $50 per barrel, and the number of oil-related K-LOCs has more than doubled.

KBRA said Wednesday that it had identified 83 loans across 65 securitized transactions, totaling $1.1 billion, that are in default or have a heightened risk of default. “With the oil glut continuing for an extended period of time, our loss estimates for the oil-related K-LOCs have meaningfully risen since the last report,” increasing to $307.2 million from $162.3 million when the ratings agency last examined this group of CMBS.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.

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