Look out Lindsey Vonn, CMBS loans are moving faster downhill than even she can keep up with, injured or not.
According to latest Fitch Ratings’ weekly report on the status of the CMBS mess, larger batches of U.S. CMBS loans are moving to special servicing (meaning they are in default) at alpine downhill speeds. In January 2010, 248 loans worth a total of $4.27 billion moved to special servicing. This figure is more than four times the amount transferred in January 2009. The size of specially serviced loans increased 2.4 times from $17.2 million in 2009, with five loans greater than $100 million. Fitch’s index suggest CMBS will continue to decline despite any bottoming-out by the residential market, typical of the lag between the two markets.
As the practice of “pretend and extend” on loan calls has diminished, more of them are approaching final maturity without available refinancing, even for performing loans. This wave of financial trouble is a long one with momentum building behind it over the next two years.
Here is the distribution of property types in special servicing along with the total loans
Office
- Total in special servicing: 509 ($7.5 billion)
- Rated universe: 6,559 ($141.5 billion)
Hotel
- Total in special servicing: 275 ($11 billion)
- Rated universe: 2,131 ($49.5 billion)
Multifamily
- Total in special servicing: 872 ($9.8 billion)
- Rated universe: 9,320 ($62.2 billion)
Retail
- Total in special servicing: 842 ($15 billion)
- Rated universe: 12,837 ($127.3 billion)
source: The Watchlist Newsletter, CoStar
