CMBS Delinquency Rate Sees Biggest Increase Since Great Recession
According to a recent GlobeSt.com article, $9.4 billion across 243 commercial loan notes were sent to special servicing in May 2020 alone. This marks the largest increase in the commercial mortgage-backed securities (CMBS) delinquency and special servicing rate since 2009, when researchers first started using the metric.
In May, the delinquency rate for commercial mortgage-backed securities rose to 7.15 %, according to the Trepp May CMBS Delinquency Report. Early June reports of troubled commercial mortgages are focused on single-asset or single-borrower deals. According to Trepp, there are four primary commercial properties to watch that are all 1) 30+ days past due, 2) in forbearance, 3) held by a financial lending institution after an unsuccessful foreclosure, or 4) in special servicing.
The Lipstick Building, 903 3rd Ave., New York. After the lease tenant, Ceruzzi Properties, defaulted on rent, the building's $272 million loan was sent to special servicing for "imminent monetary default."
Walden Galleria, a “super regional mall” in Cheektowaga, NY. The mall’s $246.6 million loan went to special servicing in April.
Hudson Bay/SimonJV Portfolio, 9617 Wilshire Blvd., Beverly Hills, CA. Twenty-four Lord & Taylor stores and 10 Saks Fifth Avenue stores across the nation currently back this $850 million loan. The loan’s special servicer claims the borrower made corporate maneuvers to decreased bondholders’ credit protection.
Ashford Office Complex, 951 Threadneedle St., Houston, TX. Citing a disruption in operations due to COVID-19, the borrower requested forbearance relief for the $52.9 million loan.