Billions in CMBS exposure in Irma's wake along Gulf Coast

Morningstar Credit Ratings LLC says that when Hurricane Irma ripped through Florida earlier this month, it brought in its wake billions of dollars worth of commercial mortgage-backed securities exposure.

In all, Florida has an estimated $39 billion in equities tied to commercial property in the storm's path.

And while final Federal Emergency Management Administration estimates may revise the figure in the future, if it makes a formal disaster declaration for parts or all of the Sunshine State, Tampa had a little more than $6 billion in potential exposure — roughly on par with the exposure to Miami, according to Morningstar.

Commercial mortgage-backed securities are essentially stocks that are backed by commercial real estate mortgages. In many cases, such mortgages from numerous properties are bundled together to mitigate investor risk.

The company also notes the Sarasota-Bradenton-Venice metropolitan statistical area has an estimated $1.3 billion in CMBS exposure, or properties that might be severely damaged -- and hence downgraded —that were in the path of the Sept. 10 hurricane.

Neither Naples nor Fort Myers, which was more directly in the path of Irma than either Sarasota or Bradenton, was referenced in the Morningstar report.

Interestingly, Morningstar notes that Florida had nearly twice the CMBS exposure as did Georgia, with $19.4 billion, and more than seven times that of both Alabama and South Carolina, which came in at $5.16 billion and $5.03 billion, respectively.

Given the relatively little amount of damage Hurricane Irma did to Gulf Coast commercial real estate, however, it is doubtful that the CMBS exposure would reach anywhere near the total potential.