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Thursday, 08 March 2018

CMBS Delinquency, Special Servicing Volumes Keep Improving as 2.0 Universe Grows

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Commercial Real Estate Direct Staff Report

The credit profile of the CMBS universe continued to improve last month.

The volume of loans that are more than 30-days late with their payments declined by $1.1 billion from the month before, to $19.2 billion, according to Trepp LLC. That results in a 4.52 percent delinquency rate, down from 4.73 percent in January.

Meanwhile, the volume of loans that are now in special servicing declined by $472 million, to $22.4 billion, according to Morningstar Credit Ratings.

Of course, the data are all skewed by the growing volume of CMBS 2.0 loans that make up the entire CMBS universe. Only 211 loans with a balance of $3.8 billion, or 0.93 percent of the 2.0 universe, are in special servicing. While that volume is extremely low, it's an increase from January, when 208 loans with a balance of $3.7 billion were in special servicing.

CMBS Loans in Special Servicing - Feb. 2018

Year Issued

#Loans

Bal $mln

2007

632

10,674.34

2006

261

4,836.90

CMBS 2.0

211

3,807.39

2005

76

1,682.04

2008

55

1,059.13

2004

20

168.59

2003

13

82.93

2001

2

55.61

2000

1

13.57

1998

6

11.22

2002

1

1.70

1996

1

1.00

1999

1

0.30

Source: Morningstar Credit Ratings

Meanwhile, a total of 1,069 legacy loans, with a balance of $18.6 billion, are in special servicing, according to Morningstar. That amounts to 51.6 percent of the entire legacy universe, up from 51.5 percent in January. While the volume of legacy loans in special servicing declined during the latest month, the size of that universe declined even more.

So it's not surprising that special servicers with large legacy portfolios saw their workloads continue to decline. Rialto Capital Advisors, which wasn't formed until after the Great Financial Crisis, saw a 7 percent increase in its actively managed portfolio last month. Every one of the 80 loans, with a balance of $1.2 billion, that it actively manages was securitized since 2010.

Most Active Special Servicers

February 2018

January 2018

Servicer

#Loans

Bal $mln

MktShr%

Bal $mln

%Chng

LNR Partners Inc.

487

7,883.41

35.20

8,102.99

(2.71)

C-III Asset Management

372

6,925.64

30.93

7,103.86

(2.51)

CWCapital Asset Management

186

3,126.24

13.96

3,240.12

(3.51)

Rialto Capital Advisors

80

1,160.18

5.18

1,084.86

6.94

Wells Fargo Bank

10

916.48

4.09

953.19

(3.85)

Torchlight Loan Services

39

816.31

3.65

816.64

(0.04)

Midland Loan Services

53

652.36

2.91

651.14

0.19

Situs

23

311.38

1.39

311.65

(0.09)

KeyCorp Real Estate

23

288.89

1.29

288.04

0.29

Blackstone Mortgage Trust

1

65.00

0.28

65.00

-

Source: Morningstar Credit Ratings

The biggest transfers to special servicing last month also were securitized in CMBS 2.0 deals. Leading the way was the $57.6 million mortgage against Eagle Ridge Village, a military-housing property near Fort Drum in upstate New York, that's expected to default at its upcoming maturity as a result of a downsizing of the military installation.

Recent Large Transfers to Special Servicing - January 2018

Property Name

Location

Prop
Type

Deal Name

Bal $mln

Notes

MStar Value
$mln

Special Servicer

Eagle Ridge Village

Evans Mills, N.Y.

APT

GSMS 2013-GC12

57.59

Imminent maturity default

35.10

Rialto Capital Advisors

129-131 Greene St.

New York, N.Y.

RET

GSMS 2014-GC26

23.00

Imminent default

25.40

LNR Partners

Alpine Commons Shopping Center

Wappingers Falls, N.Y.

RET

CD 2006-CD2

21.39

Maturity default

21.80

C-III Asset Management

Turnpike Mall

Augusta, Maine

RET

JPMCC 2011-C3

13.54

Payment default

11.60

Midland Loan Services

Floor & Décor/Garden Fresh Market

Various, Ill.

RET

UBSCM 2017-C4

12.85

Imminent default

NA

Rialto

Source: Morningstar Credit Ratings

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





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Additional Info

  • Syndicate to Realpoint: No
  • Subject: Commercial MBS (CMBS)
  • Company: Trepp LLC
  • Private: Yes
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Data Digest

 

CMBS DELINQUENCY VOLUME

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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

 

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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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