Finance
CMBS
Aug 05, 2009
By: Tonie Auer, Contributing Correspondent
As the commercial real estate market continues its downward decline, a new Fitch Ratings report indicates that large hotels lead loans of concern for U.S. CMBS with eight newly defaulted loans greater than $100 million entering special servicing, according to Fitch’s 'What's in Special Servicing' U.S. CMBS report.
“Loss severities will vary on these loans, but due to the large size of the loans, losses on loans greater than $100 million could potentially have a significant impact on their transactions,” MacNeill told CPN.
As of June 30, eight loans with balances greater than $100 million each became specially serviced or were classified as Fitch Ratings loans of concern. Fitch classified more than $75 billion or 18 percent of its rated U.S. CMBS portfolio as loans of concern. Recent vintage loans account for more than 11 percent of the $75 billion. Of these loans, about 11 percent - 2,552 loans totaling $52.3 billion - were originated in 2006 and 2007. On average, these vintages have 12 percent and 25 percent of Fitch’s loans of concern, respectively. Of the Fitch designated largest loans of concern, 678 loans have outstanding balances greater than $20 million and $50 million.
Fitch’s currently rated U.S. CMBS portfolio consists of 470 transactions, with an unpaid principal balance (UPB) of $471 billion. As of June 30, Fitch’s loan delinquency index, which measures loans 60 days delinquent, in foreclosure, or real estate owned (REO), was 2.55 percent due to the delinquency of 1,730 loans representing $12 billion in UPB. The average delinquent loan size is $6.9 million.
There are an additional 632 Fitch-rated non-delinquent -current, performing matured, or 30 days late - specially serviced loans totaling $17.4 billion that are currently with the special servicer. Excluding the Extended Stay Portfolio, which is a single-borrower transaction totaling $4.1 billion, the average loan size is $21.6 million.
The following loans are among the largest 10 loans in Fitch’s loan delinquency index. The index consists of loans 60 days or more delinquent in addition to those characterized as nonperforming matured loans, in foreclosure, or REO.
Among the loans includes Woodbridge Center, which has a $206.8 million loan secured by the 556,835-square-foot in-line portion of the Woodbridge Center, a super-regional mall located in Woodbridge, N.J., totaling 1.64 million square feet. The loan is sponsored by General Growth Properties (GGP) and was included in the April 16 chapter 11 bankruptcy filing.
Other properties include a $164.5 million loan secured by a 939,085-square-foot retail property in West Des Moines for Pointe South Mountain Resort; Mansions Multifamily Portfolio’s $160 million loan, secured by a portfolio of four cross-collateralized and cross-defaulted loans located in Austin and Round Rock, Texas; the 1.4 million-square-foot two-level Macon Mall and 419,000-square-foot Burlington Mall’s $135.8 million loan, secured by two cross-collateralized regional malls located in Macon, Ga., and Burlington, N.C.; B2 Portfolio’s $130.5 million loan. secured by a portfolio of 11 multifamily properties comprising 2,904 units located across Georgia, North Carolina, and Virginia; The Promenade Shops at Dos Lagos’ $125.2 million loan, secured by a 34,847-square-foot lifestyle/entertainment retail center located in Corona, Calif.; a $117 million loan for Loews Lake Las Vegas secured by a hotel property located in Henderson, Nev.; and a $111.8 million loan for Senior Living Properties Portfolio, secured by a portfolio of healthcare facilities.
By: Tonie Auer, Contributing Correspondent
As the commercial real estate market continues its downward decline, a new Fitch Ratings report indicates that large hotels lead loans of concern for U.S. CMBS with eight newly defaulted loans greater than $100 million entering special servicing, according to Fitch’s 'What's in Special Servicing' U.S. CMBS report.
Recent defaults include two hotel portfolios: Red Roof Inn and Extended Stay. Since Fitch's last update in April, $17.4 billion in Fitch-rated loans have entered special servicing, which does not include the Extended Stay Portfolio, which on its own totals more than $4 billion.
One troubling aspect discovered in the report is that four of the 10 largest delinquent loans have experienced appraisal reductions as a result of value declines, indicating that losses may be significant in their respective deals, said managing director Mary MacNeill. Of more than 2,000 specially serviced loans, 64 have balances are in excess of $100 million.“Loss severities will vary on these loans, but due to the large size of the loans, losses on loans greater than $100 million could potentially have a significant impact on their transactions,” MacNeill told CPN.
As of June 30, eight loans with balances greater than $100 million each became specially serviced or were classified as Fitch Ratings loans of concern. Fitch classified more than $75 billion or 18 percent of its rated U.S. CMBS portfolio as loans of concern. Recent vintage loans account for more than 11 percent of the $75 billion. Of these loans, about 11 percent - 2,552 loans totaling $52.3 billion - were originated in 2006 and 2007. On average, these vintages have 12 percent and 25 percent of Fitch’s loans of concern, respectively. Of the Fitch designated largest loans of concern, 678 loans have outstanding balances greater than $20 million and $50 million.
Fitch’s currently rated U.S. CMBS portfolio consists of 470 transactions, with an unpaid principal balance (UPB) of $471 billion. As of June 30, Fitch’s loan delinquency index, which measures loans 60 days delinquent, in foreclosure, or real estate owned (REO), was 2.55 percent due to the delinquency of 1,730 loans representing $12 billion in UPB. The average delinquent loan size is $6.9 million.
There are an additional 632 Fitch-rated non-delinquent -current, performing matured, or 30 days late - specially serviced loans totaling $17.4 billion that are currently with the special servicer. Excluding the Extended Stay Portfolio, which is a single-borrower transaction totaling $4.1 billion, the average loan size is $21.6 million.
The following loans are among the largest 10 loans in Fitch’s loan delinquency index. The index consists of loans 60 days or more delinquent in addition to those characterized as nonperforming matured loans, in foreclosure, or REO.
Among the loans includes Woodbridge Center, which has a $206.8 million loan secured by the 556,835-square-foot in-line portion of the Woodbridge Center, a super-regional mall located in Woodbridge, N.J., totaling 1.64 million square feet. The loan is sponsored by General Growth Properties (GGP) and was included in the April 16 chapter 11 bankruptcy filing.
Other properties include a $164.5 million loan secured by a 939,085-square-foot retail property in West Des Moines for Pointe South Mountain Resort; Mansions Multifamily Portfolio’s $160 million loan, secured by a portfolio of four cross-collateralized and cross-defaulted loans located in Austin and Round Rock, Texas; the 1.4 million-square-foot two-level Macon Mall and 419,000-square-foot Burlington Mall’s $135.8 million loan, secured by two cross-collateralized regional malls located in Macon, Ga., and Burlington, N.C.; B2 Portfolio’s $130.5 million loan. secured by a portfolio of 11 multifamily properties comprising 2,904 units located across Georgia, North Carolina, and Virginia; The Promenade Shops at Dos Lagos’ $125.2 million loan, secured by a 34,847-square-foot lifestyle/entertainment retail center located in Corona, Calif.; a $117 million loan for Loews Lake Las Vegas secured by a hotel property located in Henderson, Nev.; and a $111.8 million loan for Senior Living Properties Portfolio, secured by a portfolio of healthcare facilities.
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