• Brian McGowan

CMBS Delinquency Rate Sees Biggest Increase Since Great Recession

According to a recent 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. 

Read the full article here.

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