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Friday, 07 February 2020

CMBS Special Servicing Volume Sees Largest Monthly Drop Since May 2019

The volume of CMBS loans in special servicing declined last month by $595.3 million to $13.6 billion, marking the largest decline in volume since last May, according to DBRS Morningstar. January's volume is the lowest it's been since December 2008, when it was $12.7 billion.

Commercial Real Estate Direct Staff Report

The volume of CMBS loans in special servicing declined last month by $595.3 million to $13.6 billion, marking the largest decline in volume since last May, according to DBRS Morningstar.

January's volume is the lowest it's been since December 2008, when it was $12.7 billion. That was at the start of what became a rapid runup in volumes, which hit a peak of $91.2 billion in September 2010. That had amounted to 13.35 percent of the $682.8 billion CMBS universe then extant.

The $13.6 billion now in special servicing amounts to 2.68 percent of what's a $505.9 billion universe, which grew by nearly $6 billion from December when the $14.2 billion of loans in special servicing amounted to 2.83 percent of the CMBS universe.

Because the volume of legacy loans - those securitized before the Great Financial Crisis - continues to shrink and now amounts to just less than $15 billion, it's no surprise that the overwhelming majority of recent transfers have involved CMBS 2.0 loans - those securitized since the crisis. But those transfers were outweighed by resolutions.

CMBS Loans in Special Servicing

 

Jan. 2020

Dec. 2019

 
 

# Loans

Bal $mln

Shr %

# Loans

Bal $mln

Change %

CMBS 2.0

376

6,916.20

51.01

374

6,573.43

0.05

2007

199

3,827.96

28.23

217

4,295.15

(0.11)

2006

99

1,978.41

14.59

113

2,144.41

(0.08)

2005

24

493.34

3.64

29

692.91

(0.29)

2008

13

173.99

1.28

13

174.01

(0.00)

2004

7

127.88

0.94

8

231.01

(0.45)

2003

4

18.84

0.14

4

18.84

0.00

1998

5

10.66

0.08

6

12.83

(0.17)

2000

1

8.16

0.06

1

8.16

0.00

2001

2

2.08

0.02

2

2.12

(0.02)

1999

2

0.88

0.01

2

0.88

0.00

Totals

732

13,558.40

 

769

14,153.74

(0.04)

CMBS 2.0 loans now make up just more than 51 percent of all loans in special servicing, marking the first time that the cohort has comprised more than half of all loans in special servicing.

The largest recent transfer involved some of the $285 million of financing against the 248,457 square feet of retail space at 229 West 43rd St., the former New York Times building in Manhattan's Times Square area.

The loan is divvied up among four conduit transactions: CD, 2017-CD3 holds a $100 million piece; JPMDB Commercial Mortgage Securities Trust, 2017-C5, holds an $80 million piece; CD, 2016-CD2, holds a $75 million piece; and Citigroup Commercial Mortgage Trust, 2017-P7, holds a $30 million piece. Not all of them have transferred to special servicer KeyCorp Real Estate Capital Markets yet. KeyCorp's active special servicing portfolio, as a result, grew by 42 percent last month, to nearly $595 million.

The CMBS loan is senior to a pair of mezzanine loans totaling $85 million that are held by Paramount Group and SL Green Realty Corp.

Property Name

Location

Prop Type

Deal ID

Bal $mln

Notes

Mstar Value $mln

Special Servicer

229 West 43rd St. Retail

New York

RET

JPMDB 2017-C5
CD 2016-CD2

155.00

Imminent default

197.20

KeyCorp

NY and Conn NNN Portfolio

Various

RET

BMARK 2018-B5

57.38

Imminent default

93.70

Midland Loan Services

600 Broadway

New York

RET

DBJP 2016-C1
CGCMT 2016-GC37
CGCMT 2016-P3

113.88

Imminent default

125.10

C-III Asset Management

Riverview Center

Menands, NY

MIX

COMM 2015-PC1

30.71

Imminent default

35.70

Rialto Capital Advisors

Woodlands Corporate Center

Wheatfield, Niagara Falls, NY

OFF/IND

GSMS 2015-GC34

22.85

Imminent default

15.10

LNR Partners

The collateral property, which has suffered from tenant rental delinquency and a ret

The collateral property, which has suffered from tenant rental delinquency and a retailer bankruptcy, is owned by a tenant-in-common group affiliated with the Kushner Cos.

One of the space's main tenants, Gulliver's Gate, a 45,675-sf venue that displays miniature models of New York and other cities, filed for bankruptcy last October and hasn't made any rental payments since then. And National Geographic, which occupies 59,137 sf, also is delinquent with its rent. Its lease, which was to have run through October 2032, has been terminated.

CMBS Special Servicers

 

Jan. 2020

Dec. 2019

 

Special Servicer

#Loans

Bal $mln

#Loans

Bal $mln

Chng %

LNR Partners, LLC

266

4,531.43

277

4,587.99

-1.23%

C-III Asset Management LLC

105

2,690.50

120

2,984.88

-9.86%

Rialto Capital Advisors

176

2,459.37

185

2,482.62

-0.94%

Midland Loan Services Inc.

74

1,207.43

69

1,095.31

10.24%

CWCapital Asset Management

51

816.38

63

1,337.95

-38.98%

Wells Fargo Bank

2

729.62

2

728.90

0.10%

Keycorp Real Estate Capital Markets

25

594.47

22

418.64

42.00%

Torchlight Loan Services LLC

12

294.03

13

304.48

-3.43%

Capital Trust, Inc.

1

65.00

1

65.00

0.00%

Hudson Advisors

2

35.69

2

35.74

-0.13%

Meanwhile, CWCapital Asset Management, which until last April had been among the sector's three most-active special servicers, slipped another notch to fifth most-active. Its portfolio shrunk by nearly 39 percent last month to 51 loans with a balance of $816.4 million from $1.3 billion in December. At the same time, Midland Loan Services, which handles a substantial volume of CMBS 2.0 loans, saw the size of its actively managed portfolio increase by more than 10 percent to $1.2 billion from $1.1 billion.

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

sschartfp

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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