CRED iQ’s WAR (Weekly Asset Review) Report – Distressed Multifamily Opportunities

CRED iQ’s updated valuations for five distressed multifamily properties that are in special servicing.

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This week, CRED iQ calculated real-time valuations for five distressed loans secured by multifamily properties. The CRED iQ valuations factor in a base-case (Most Likely), a downside (significant loss of tenants), and dark scenarios (100% vacant). For full access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and contact information, sign up for a free trial here.

1209 Dekalb

127-unit Multifamily, Brooklyn, NY 11221

The $46.0 million loan transferred to special servicing on 10/22/20 due to maturity default. The loan is secured by a 5-story mid-rise apartment building and 46 parking spaces located on 1209 Dekalb Avenue in the Bushwick neighborhood of Brooklyn. Foreclosure appears to be the likely workout strategy even though the borrower retained a third-party advisor and requested for a maturity extension. However, with the state of New York’s foreclosure moratorium in place through 8/31/21, any such filings will be on hold. Occupancy at the property declined from 99% in 2019 to 86% in 2020, corresponding to an 18% decline in NCF. The loan’s DSCR during 2020 was 1.16. For the full valuation report and loan-level details, click here.

1502 Dekalb Avenue

6-unit Multifamily, Brooklyn, NY 11237

Also in Bushwick, but on a much smaller scale than 1209 Dekalb, a $924,000 small-balance loan transferred to special servicing on 8/20/19 for chronic delinquency. A 3-story apartment building serves as collateral and is located at 1502 Dekalb Avenue. The property had an outstanding water lien, which was advanced by the special servicer, Arbor Commercial Mortgage, in order to prevent the New York City Finance Department from selling the obligation. The loan sponsor has been unresponsive with any communication or financial reporting. For the full valuation report and loan-level details, click here.

Glenwood Farms Apartments

294-unit Multifamily, Richmond, VA 23223

The $9.7 million floating-rate loan, inclusive of a $7.3 million note and a $2.4 participation funded post-origination, transferred to special servicing on 2/25/21 for maturity default. The loan is secured by a series of walk-up apartments located in Richmond, VA. The loan still has 2, 12-month extension options remaining; however, the Borrower has been unresponsive with any communication with the special servicer. A term sheet for refinancing was supposedly signed for the end the April 2021; however, the loan remained outstanding as of June 2021. For the full valuation report and loan-level details, click here.

Autumn Run

320-unit Multifamily, Naperville, IL 60563

A $5.5 million floating-rate junior-lien mortgage transferred to special servicing on 2/4/21 due maturity default after the borrower was granted two 60-day extensions. The loan had an original maturity date of 10/1/20 and the extension was intended to help align maturity dates with the first-lien $8.5 million fixed-rate mortgage that is scheduled to mature on 10/1/21. The first lien mortgage is current in payment and has not transferred to special servicing. The two loans are secured by the Autumn Run Apartments, a garden-style complex located in Naperville, IL. Occupancy at the property declined to 84% during 2020, compared to 92% in the prior year, and NCF was down about 15% year over year. The borrower appears to be waiting until July 2021, when the senior mortgage is open for prepayment, to securing refinancing for the total outstanding debt. For the full valuation report and loan-level details, click here.

Dauphin

22-unit Multifamily, Philadelphia, PA 19125

We close out this week’s WAR report with a local distressed opportunity in Philadelphia. This $2.6 million loan transferred to special servicing on 5/11/21 due to maturity default after the borrower was previously granted a 60-day extension. The loan is secured by a 3-story mid-rise apartment building located across multiple addreses at 2152-2158 East Dauphin Street in the submarket of Fishtown. The borrower had been in the process of securing a HUD loan; however, was unable to complete the refinance prior to the end of the maturity extension. The special servicer is in discussions for additional options. For the full valuation report and loan-level details, click here.

About CRED iQ

CRED iQ is a commercial real estate data, analytics, and valuation platform providing actionable intelligence to CRE and capital markets investors. Subscribers to CRED iQ use the platform to identify valuable leads for leasing, lending, refinancing, distressed debt, and acquisition opportunities. For full access to our loan database and valuation platform, sign up for a free trial below: