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Friday, 08 February 2019

Big Loan Payoff Helps Trim CMBS Special Servicing Volume

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Commercial Real Estate Direct Staff Report

The pay-off last month of a $568 million loan that had been in special servicing since last July was instrumental in reducing the volume of CMBS loans in special servicing to $16.9 billion from $17.9 billion at the end of last year, according to Morningstar Credit Ratings.

The paid off loan was securitized through COMM, 2016-SAVA, and was backed by 155 skilled-nursing properties with 18,870 beds. The loan, the senior portion of a $1.05 billion financing package that was slated to mature last October, had transferred as it was expected to default at its maturity as collateral cash flow had dropped by more than 21 percent since 2016. The loan was retired, partially with proceeds from a $605 million financing package provided by Credit Suisse, which is securitizing a $335 million senior piece through Credit Suisse Mortgage Securities Corp., 2019-SKLZ.

CMBS Loans in Special Servicing - Jan 2019

Property Type

Loans

Bal $mln

% of Total

Retail

461

7,467.51

44.29

Office

216

5,281.62

31.33

Hotel

100

1,564.30

9.28

Multi-family

79

1,026.52

6.09

Other

53

1,019.42

6.05

Industrial

31

440.88

2.61

Healthcare

3

59.63

0.35

TOTAL

943

16,859.88

 

The CMBS industry's special servicers now are managing 943 loans, down from the 973 they handled in December. And as a result of the pay-off of the SAVA loan, the volume of healthcare loans in special servicing dropped by 91 percent to less than $60 million. The loans against every other property type also saw declines in their special servicing volume.

CMBS Loans in Special Servicing - Jan. 2019

Year Issued

#Loans

Bal $mln

% of Total

2007

375

6,826.04

40.49

CMBS 2.0

290

4,897.17

29.05

2006

176

3,416.73

20.27

2005

45

1,094.79

6.49

2008

24

376.22

2.23

2004

17

189.43

1.12

2000

2

21.73

0.13

2003

4

18.84

0.11

1998

3

11.23

0.07

1999

4

3.23

0.02

1997

1

3.01

0.02

2001

2

1.45

0.01

TOTAL

943

16,859.88

 

Loans continue to move into special servicing, but resolutions outpace them. That's even despite the recent transfer of a couple of sizable loans. Those include the $222.6 million loan, securitized through ML-CFC Commercial Mortgage Trust, 2007-6, against a portfolio of eight retail properties with 1.3 million square feet in Florida, commonly referred to as the MSKP Retail Portfolio. The loan was modified in 2012 into a $130.3 million A-note and $93.1 million B-note and its maturity was extended to next month from its original March 2017. With that date fast approaching, the loan was transferred last month because it wasn't expected to be retired by its maturity. The collateral properties, owned by a venture of Morgan Stanley and Kitson & Partners, are 85 percent occupied and last year were on track to generate $10.4 million of net cash flow, up from the $9.8 million they generated in 2017. But nearly 20 percent less than the $12.9 million they generated in 2007.

Property Name

Location

Prop Type

DealID

Bal $mln

Notes

Mstar Value $mln

Special Servicer

MSKP Retail Portfolio

Various, Fla.

RET

MLCFC 2007-6

222.62

Imminent maturity default

115.30

CWCapital Asset Management

Heron Lakes

Houston

OFF

JPMBB 2014-C26

50.28

Borrower bankruptcy

51.40

Midland Loan Services

Employers Reinsurance Corp. I

Overland Park, Kan.

OFF

JPMCC 2004-PNC1

32.01

Imminent default

NA

C-III Asset Management

Preserve at Autumn Ridge II

Watertown, NY

APT

CSAIL 2016-C7

20.07

Imminent non-monetary default

24.00

Rialto Capital Advisors

Hilton Garden Inn Pittsburgh-Cranberry

Cranberry Twp, Pa.

HOT

GSMS 2014-GC18

16.06

Imminent maturity default

13.80

LNR Partners

Meanwhile, LNR Partners continues to have the largest active portfolio, accounting for nearly 36 percent of the entire universe of loans in special servicing. CWCapital Asset Management, which still has $2.2 billion of assets in its portfolio, is special servicer for the MSKP portfolio, which bolstered the size of its portfolio by 2 percent since December.

Special Servicer

Loans

Bal $mln

Mkt Shr%

LNR Partners, LLC

378

6,054.23

35.91

C-III Asset Management LLC

208

4,064.48

24.11

CWCapital Asset Management

98

2,215.26

13.14

Rialto Capital Advisors

134

1,959.22

11.62

Midland Loan Services Inc.

52

792.82

4.70

Torchlight Loan Services LLC

22

601.07

3.57

Keycorp Real Estate Capital Markets

23

482.85

2.86

Wells Fargo Bank

2

203.64

1.21

Situs

15

155.23

0.92

Green Loan Services

1

80.20

0.48

Comments? E-mail Orest Mandzy, or call him at (267) 327-4281.





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Data Digest

 

CMBS DELINQUENCY VOLUME

dqdataFP1

 

CMBS SPECIAL SERVICING VOLUME

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Top Bookrunners Domestic, Private-Label CMBS - 2017
Investment Bank #Deals Vol$mln MktShr%
Goldman Sachs 17.59 11,819.34 13.68
JPMorgan Securities 14.52 10,968.11 12.70
Citigroup 12.04 10,012.71 11.59
Wells Fargo Securities 14.02 9,936.06 11.50
Deutsche Bank 12.55 9,879.74 11.44

 

RCA CPPI

 

cppichart FP

 

 

CMBS 2.0 Spreads

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Top CMBS Loan Contributors - 2017
Lender #Loans Vol$mln MktShr%
Goldman Sachs 146.89 11,719.34 13.63
JPMorgan Chase Bank 117.68 10,114.14 11.76
Deutsche Bank 198.48 9,689.97 11.27
Morgan Stanley 166.18 8,539.78 9.93
Citigroup 199.05 8,088.24 9.41

 

 

 

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