Daily Real Estate News  |  September 23, 2005  |   Rita May Be Worse Than Katrina for Bond Holders Standard & Poor's calculates that nearly three times as much commercial mortgage-backed securities could be compromised by Hurricane Rita than were affected by the previous Hurricane Katrina. In the Houston market alone, nearly 2,000 commercial properties—everything from office buildings to shopping centers—valued at approximately $11 billion are bundled together in such bonds. Across the three Gulf Coast states hit by Katrina, by comparison, some 1,100 properties in 345 commercial mortgage-backed securities deals were affected. Bears Stearns Senior Managing Director Randy Reiff hopes that buildings in the more in-land Texas cities of Houston and even Dallas will not be damaged nearly as badly as similar properties in New Orleans, which is below sea level and proved to be much more vulnerable to flooding. REITs such as Camden Property Trust and Gables Residential Trust that have large concentrations of properties in the Houston metro area are holding their breath with the approach of Rita. SNL Financial reports that the Houston market boasts the highest percentage of REIT-owned retail centers in the country in terms of square footage, with Weingarten Realty Investors having the greatest exposure.

Source: Wall Street Journal (09/23/05); Haughney, Christine