Top 50 Markets by CRED iQ Distress Metrics

By

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October 18, 2024

CRED iQ’s research team explored distress trends across the country in our latest geographic study. Our analysis is built upon current balances of all of the loans which CRED iQ tracks within each market; and then calculated the proportion of loans that are distressed. We then compared these results with our previous report from August 29^th to reveal near-term trends.

Our report yields the CRED iQ Distress Rate (which combines Delinquent and/or Specially Serviced loans) for the top 50 MSAs with the highest amount of distress of the largest 65 CRE markets.

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Minneapolis now leads the top MSAs with 36.2% of their loans in distress. The former number two market soared to the number one spot after logging a stunning increase of 1,260 basis point increase from August. Stamford (32.2%) landed in 2^nd place and saw the largest increase in our study from the August print of just 7.7%. A significant factor in Stamford’s increase was the default of an office portfolio. See the Loan Highlight section for details.

Tulsa (26.4%), Hartford (25.9%) and Portland (25.3%) round out the top 5. Former number one Charlotte came in at number 6 with a 24.6% distress rate compared to 24.8% in August. Adding some perspective, the overall distress rate for all loans across every market was 9.1% as of our October 3^rd report.

Looking deeper at MSAs experiencing the most distress, the office segment is a major factor in Stamford (93% of distressed loans are from the office segment), Trenton (91%), and Tulsa (88%).

Minneapolis (83%) and Birmingham (55%) see more than half of the markets’ distress emanating from the retail segment. Hotel drives the most distress in Portland (77%), while Nashville distress primarily stems from multifamily (81.9%).

Loan Highlight

The 982,483 SF Stamford Plaza Portfolio backs a $246.6M loan that defaulted at its August 2024 maturity. Consequently, the loan transferred to the special servicer in August 2024.

The portfolio consists of four adjacent office towers in downtown Stamford. Most recently, the portfolio was 71% occupied and performing with a below breakeven DSCR of 0.69. The collateral was valued at $427.2 million at underwriting in June 2014.

Early Warning Signals

CRED iQ’s early signals of upcoming distress include loans that have been added to the servicer’s watchlist for credit-related issues. Issues include weak financial performance, low occupancy, high tenant rollover, upcoming maturity risk among other reasons to be flagged as possible troubles.

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

Announcing BMO 2024-5C7

By

Michael Haas

-

October 14, 2024

0

A CRED iQ Preliminary Analysis

DATA HEREIN PROVIDED TO CRED IQ IS FROM A PRELIMINARY PROSPECTUS AND MAY BE AMENDED OR SUPPLEMENTED PRIOR TO TIME OF SALE

Access Loan Details

Deal Overview

The BMO 2024-5C7 CMBS deal is a new issuance securitization for the CMBS market, with a total pooled balance of approximately $959.7 million. The deal is jointly managed by prominent financial institutions BMO, Deutsche Bank, Citigroup, Goldman Sachs, SG Americas, and UBS. The deal is collateralized by 35 loans and secured by 74 properties across a variety of sectors, including multifamily, industrial, and office. The strategic geographic distribution of these properties ensures balanced exposure across major markets. The deal’s weighted average loan-to-value (LTV) ratio of 60.5%, and the weighted average mortgage interest rate is 6.38%.

Key Metrics

The loan pool for BMO 2024-5C7 is structured to include a mix of amortizing and interest-only loans, with 2.7% of the mortgage pool having scheduled amortization. The remainder of the pool (97.3%) consists of interest-only payments throughout the loan term, offering investors a steady income stream. The pool boasts a weighted average debt service coverage ratio (DSCR) of 1.70x. The weighted average net operating income (NOI) debt yield is 11.3%.

Geography & Property Types

A key strength of the BMO 2024-5C7 CMBS deal is its diverse property type distribution, which enhances portfolio resilience. Multifamily properties, including high rise, garden, mid rise, and low rise subtypes constitute 51.0% of the total balance, while industrial properties account for 20.9% of the balance. The geographic distribution of the properties across prime markets, including high-growth areas in New York City, Boston, and Atlanta.

Access Loan Details

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

THE DATA, INFORMATION AND/OR RELATED MATERAL (“DELIVERABLES”) IS BEING OFFERED AS-IS/WHERE-AS CONDITION. CRED-IQ MAKES NO REPRESENTATION OR WARRANTY AS TO QUALITY OR ACCURACY OF SUCH DELIVERABLES BEING PURCHASED, WHETHER EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTE, OR OTHERWISE, AND CRED-IQ SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES INCLUDING WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE, TECHNICAL PERFORMANCE, AND NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, YOU AS CUSTOMER ACKNOWLEDGE THAT YOU HAVE NOT AND ARE NOT RELYING UPON ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, OR UPON ANY REPRESENTATION OR WARRANTY WHATSOEVER AS TO THE DELIVERABLES IN ANY REGARDS WHATSOEVER, AND ACKNOWLEDGE THAT CRED-IQ MAKES NO, AND HEREBY DISCLAIMS ANY, REPRESENTATION, WARRANTY OR GUARANTEE THAT THE PURCHASE, USE OR COMMERCIALIZATION OF ANY DELIVERABLES WILL BE USEFUL TO YOU OR FREE FROM INTERFERENCE. BY ACCEPTANCE OF THE DELIVERABLES, YOU HEREBY RELEASE CRED-IQ AND ITS AFFILIATES AND AGENTS FROM ALL CLAIMS, DAMAGES AND LIABILITY ARISING HEREUNDER.

Distress Rate Hits All-time High of 13.1% for CRE CLOs

By

Michael Haas

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October 10, 2024

0

The CRED iQ research team dove into the CRE CLO ecosystem this week. We were interested in how the markets have evolved since our July report. The CRED iQ Distress rate reached 13.07% at the close of Q3, notching a whopping 277 basis point increase from last quarter’s close — setting a new record for the CRE CLO category.

The CRED iQ distress rate includes any loan reported 30 days delinquent, past their maturity, specially serviced, or a combination of these. We also examined the most recent property-level net operating income figures and compared them to underwritten expectations.

Given the rapid surge in interest rates, these floating-rate loans have shown significant declines in debt-service-coverage-ratios (DSCR). Approximately 53.9% of the properties within the distressed CRE CLO sector have reported a lower DSCR (NCF) compared to their underwritten DSCR. These numbers are based on the underwritten “as is” DSCRs and NOI. CRED iQ’s analysis uncovers that 62.3% of all distressed CRE CLOs are operating below a 1.00 DSCR.

Removing the interest rate variable, CRED iQ data uncovered that 41.8% of all CRE CLO distressed loans perform below their underwritten net operating income levels. Net operating income is a key variable in calculating a loan’s DSCR which determines the strength and creditworthiness of a given loan.

From a segment perspective, office leads in destress, logging an 18.5% distress rate, compared to 17.1% at the close of Q2. With that said, the office sector is off it’s 2024 high of 21.3% in February.

Multifamily saw a 13.7% distress rate, or flat to Q2. The segment spent most of the quarter at elevated levels as high as 16.4% in August, before seeing a 270-basis point reduction in the September print.

Retail (11.1%) and Hotel (8.5%) round out the top four. Self-storage scored another 0% distress score and Industrial at 1.1% –operating at these levels across nearly every investment category.

Showing upward trending, hotels saw a 460-basis point increase during Q3, followed by retail which logged a 220 basis point increase.

Looking across payment status, 29.4% of loans are performing matured, with another 34.9% non-performing matured, meaning 64.3% of the CRE CLO loans in our study are past their maturity dates.

Analysis Scope & Methodology

CRED iQ consolidated all of the loan-level performance data for every outstanding CRE CLO loan to measure the underlying risks associated with these transitional assets. Our team examined $72.4 billion in active CRE CLO loans. Many of these loans were originated in 2021 at times where cap rates were low, valuations high, low interest rates, and are starting to run into maturity issues given the spike in rates.

Some of the largest issuers of CRE CLO debt over the past five years include MF1, Arbor, LoanCore, Benefit Street Partners, Bridge Investment Group, FS Rialto, and TPG.The vast majority of the $79.1 billion in CRE CLO loans are structured with floating rates with 3-year loan terms equipped with loan extension options if certain financial hurdles are met.

Access CRED iQ

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

Office Distress Nearly Triples in the Last 18 Months – Reaches New Peak

By

Michael Haas

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October 3, 2024

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The overall CRED iQ distress was flat to our September 5^th print at 9.1% remaining at a record high. CRED iQ’s special servicing rate increased to 8.4% from 8.0% last month, while the CRED iQ delinquency rate, consistent with the distress rate, came in flat at 6.8%. Most noteworthy change was the Office Distress reaching its new peak at 14.8%, a 156% increase from 18 months ago when distress rates were only 5.8%.

The CRED iQ team evaluated payment statuses reported for each loan (securitized by CMBS financing), along with special servicing status as part of our monthly distress update.

Segment Review

Multifamily slowed its distress rate growth, increasing to 11.2% from 11.0% in this print. Nine months ago, that rate was 2.6%. The multifamily segment loses its second-place status to retail, but the differences remain fractional. These figures include all multifamily securitized with CMBS financing.

The office segment rose by 108 basis points month-over-month, which earns office the second largest change this print and widens the office segment lead amongst all property types.

After reducing their distress rate last month, retail added 98 basis points. At 11.4%, retail has the second highest overall distress rate amongst all property types.

The hotel segment was up marginally, logging 8.6% of their properties in distress

As reported in our September 5^th report, the industrial segment returned to its normal, sub 1% distress rate (0.6%) after resolving payment status issues associated with one large SBLL portfolio valued at $2.18 billion).

Meanwhile, self-storage saw a similar swing to 2.4% from 0.1% in our previous report. Increased distress in this sector is caused by a $356.5 million SBLL loan falling delinquent. More details are included in the Loan Highlight section.

Payment Status

Looking at distressed loan payment status, 18% of the loans are current. While 1.1% of loans are attributable to late (but in the grace period) and 6.5% of loans were late (but less than 30 days DQ). Combining these three metrics 25.6% of all loans were current / late within the grace period / less than 30 days delinquent.

Non-Performing Matured increased from 30.9% to 42.3%, 90+ Days Delinquent increased from 10.9% to 12.8%. Performing Matured decreased from 16.2% in our September report to 14.5% in this print .

Analysis Methodology

CRED iQ’s distress rate aggregates the two indicators of distress – delinquency rate and specially serviced rate – yielding the distress rate. The index includes any loan with a payment status of 30+ days delinquent or worse, any loan actively with the special servicer, and includes non-performing and performing loans that have failed to pay off at maturity.

It’s important to note that CRED iQ’s distress rate factors in all CMBS properties that are securitized in conduits and single-borrower large loan deal types. CRED iQ tracks Freddie Mac, Fannie Mae, Ginnie Mae, and CRE CLO loan metrics in separate analyses.

Loan Highlights

Office Loan

The $525.0 million loan backed by the Mobil Building, a 1.7 million SF mixed-use property failed to payoff at maturity in September 2024. The interest-only loan includes a $175.0 million mezzanine loan, representing a total debt of $700.0 million. The loan transferred to the special servicer due to maturity default. Servicer commentary indicates discussions of loan extension are being discussed.

The collateral consists of office and retail space located on East 42nd Street in the Grand Central submarket. Built in 1954, the property was valued at $900.0 million ($527/SF) at underwriting in June 2014. The property was 89.2% occupied and most recently had a DSCR of 1.39.

Self Storage Loan

A $356.5 million SBLL loan, backed by a portfolio of 29 self storage properties fell delinquent this month as it failed to pay off at its September 2024 maturity date. The portfolio consists of an aggregate of 24,076 units or 2.2 million SF across 12 states. The collateral was valued at $541.7 million ($22,498/unit) at contribution in April 2022. The portfolio had a DSCR of 0.98 and was 92.1% occupied.

The interest-only loan was added to the servicer’s watchlist in February 2024 due to delinquent taxes. The September 2024 servicer commentary indicates the borrower is seeking a short-term extension through mid-October to avoid purchasing another cap rate.

Access CRED iQ Data Platform

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

Announcing BANK 2024-5YR10

By

Michael Haas

-

September 30, 2024

0

A CRED iQ Preliminary Analysis

DATA HEREIN PROVIDED TO CRED IQ IS FROM A PRELIMINARY PROSPECTUS AND MAY BE AMENDED OR SUPPLEMENTED PRIOR TO TIME OF SALE

Access Loan Details

Deal Overview

The BANK 2024-5YR10 CMBS deal is a new issuance securitization for the CMBS market, with a total pooled balance of approximately $837.8 million. The deal is jointly managed by prominent financial institutions Wells Fargo, Bank of America, JP Morgan, and Morgan Stanley. The deal is collateralized by 42 loans and secured by 83 properties across a variety of sectors, including retail, manufactured housing, and hospitality. The strategic geographic distribution of these properties ensures balanced exposure across major markets. The deal’s weighted average loan-to-value (LTV) ratio of 55.0%, and the weighted average mortgage interest rate is 6.40%.

Key Metrics

The loan pool for BANK 2024-5YR10 is structured to include a mix of amortizing and interest-only loans, with 14.9% of the mortgage pool having scheduled amortization. The remainder of the pool (85.1%) consists of interest-only payments throughout the loan term, offering investors a steady income stream. The pool boasts a weighted average debt service coverage ratio (DSCR) of 1.75x. The weighted average net operating income (NOI) debt yield is 12.8%.

Geography & Property Types

A key strength of the BANK 2024-5YR10 CMBS deal is its diverse property type distribution, which enhances portfolio resilience. Retail properties, including anchored, shadow anchored, single tenant, super regional mall, and unanchored subtypes constitute 22.6% of the total balance, while manufactured housing properties account for 18.8% of the balance. The geographic distribution of the properties across prime markets, including high-growth areas in New York City, Los Angeles, and Houston.

Access Loan Details

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

THE DATA, INFORMATION AND/OR RELATED MATERAL (“DELIVERABLES”) IS BEING OFFERED AS-IS/WHERE-AS CONDITION. CRED-IQ MAKES NO REPRESENTATION OR WARRANTY AS TO QUALITY OR ACCURACY OF SUCH DELIVERABLES BEING PURCHASED, WHETHER EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTE, OR OTHERWISE, AND CRED-IQ SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES INCLUDING WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE, TECHNICAL PERFORMANCE, AND NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, YOU AS CUSTOMER ACKNOWLEDGE THAT YOU HAVE NOT AND ARE NOT RELYING UPON ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, OR UPON ANY REPRESENTATION OR WARRANTY WHATSOEVER AS TO THE DELIVERABLES IN ANY REGARDS WHATSOEVER, AND ACKNOWLEDGE THAT CRED-IQ MAKES NO, AND HEREBY DISCLAIMS ANY, REPRESENTATION, WARRANTY OR GUARANTEE THAT THE PURCHASE, USE OR COMMERCIALIZATION OF ANY DELIVERABLES WILL BE USEFUL TO YOU OR FREE FROM INTERFERENCE. BY ACCEPTANCE OF THE DELIVERABLES, YOU HEREBY RELEASE CRED-IQ AND ITS AFFILIATES AND AGENTS FROM ALL CLAIMS, DAMAGES AND LIABILITY ARISING HEREUNDER.

Interest Rate Trends by Property Type – A Downward Trend

By

Michael Haas

-

September 27, 2024

0

The CRED iQ research team focused upon the underwriting of the latest market transactions. We wanted to understand they key loan metrics across this universe to get a real-time sense of the new issues marketplace.

CRED iQ analyzed underwriting metrics for the 28 CMBS conduit issuances in 2024. This analysis builds upon our April report that covered the 8 conduit transactions that were issued in Q1.

This analysis examined interest rates ranges and averages over the past twelve months.

Interest Rate Trending

Over the past 12 months, average interest rates peaked/spiked in November of 2023, after which we start to see a more downward trend leading up to today.

By Property Type

Office saw the second highest average interest rate for all loans at 7.16%. The Office segment operated in an interest rate range between 4.84% and 8.44%.
Multifamily Interest rates ranged from 4.68% to 8.33% with an average of 6.68%.
Retail interest rates ranged from 5.18% to 9.04% with an average of 6.96%.
Hotels had the highest average interest rate (7.48%).
Self-storage had the lowest average interest rate at 6.6% and operated at the lowest range of all property types (4.5% to 7.99%)

Notable Example

The Piazza is a 332-unit, multifamily complex in the Northern Liberties submarket of Philadelphia. The asset is backed by a $108.6 million ($382,530/unit) senior loan plus an $18.5 million mezzanine loan for a total debt package of $127 million. Originated in August 2024, the interest-only loan has a 5.91% interest rate and is scheduled to mature in August 2029. The previous loan was packaged into a CRE CLO in May 2021 that had a total loan amount of $134.9 million. In order to refinance this loan the borrower contributed $22.5 million in cash equity.

The mid-rise complex was constructed in 2006 and most recently renovated in 2019. The former WeWork space (20,951 SF) at the property is in the process of being converted to 16 additional units that are expected to be completed by March 2025. The property was valued as-is at $155.8 million ($469,277/unit) in May 2024. At underwriting, the asset was 90.7% occupied and had a DSCR of 1.35.

Prior CRE CLO Loan (May 2021)

New CMBS Conduit Loan (Aug 2024)

Access CRED iQ Data Platform

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

Announcing BANK 2024-BNK48

By

Michael Haas

-

September 24, 2024

0

A CRED iQ Preliminary Analysis

DATA HEREIN PROVIDED TO CRED IQ IS FROM A PRELIMINARY PROSPECTUS AND MAY BE AMENDED OR SUPPLEMENTED PRIOR TO TIME OF SALE

Access Loan Details

Deal Overview

The BANK 2024-BNK48 CMBS deal is a new issuance securitization for the CMBS market, with a total pooled balance of approximately $1.1B. The deal is jointly managed by prominent financial institutions Morgan Stanley, JP Morgan, Goldman Sachs, Wells Fargo, Bank of America, and Citigroup. The deal is collateralized by 40 loans and secured by 79 properties across a variety of sectors, including hospitality, retail, and office. The strategic geographic distribution of these properties ensures balanced exposure across major markets. The deal’s weighted average loan-to-value (LTV) ratio of 50.9%, and the weighted average mortgage interest rate is 6.16%.

Key Metrics

The loan pool for BANK 2024-BNK48 is structured to include a mix of amortizing and interest-only loans, with 15.9% of the mortgage pool having scheduled amortization. The remainder of the pool (84.1%) consists of interest-only payments throughout the loan term, offering investors a steady income stream. The pool boasts a weighted average debt service coverage ratio (DSCR) of 2.38x. The weighted average net operating income (NOI) debt yield is 16.0%.

Geography & Property Types

A key strength of the BANK 2024-BNK48 CMBS deal is its diverse property type distribution, which enhances portfolio resilience. Hospitality properties, including full-service, extended stay, select-service, and limited-service subtypes constitute 28.2% of the total balance, while retail properties account for 20.8% of the balance. The geographic distribution of the properties across prime markets, including high-growth areas in New York City, Washington DC, and Asheville, NC.

Access Loan Details

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

THE DATA, INFORMATION AND/OR RELATED MATERAL (“DELIVERABLES”) IS BEING OFFERED AS-IS/WHERE-AS CONDITION. CRED-IQ MAKES NO REPRESENTATION OR WARRANTY AS TO QUALITY OR ACCURACY OF SUCH DELIVERABLES BEING PURCHASED, WHETHER EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTE, OR OTHERWISE, AND CRED-IQ SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES INCLUDING WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE, TECHNICAL PERFORMANCE, AND NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, YOU AS CUSTOMER ACKNOWLEDGE THAT YOU HAVE NOT AND ARE NOT RELYING UPON ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, OR UPON ANY REPRESENTATION OR WARRANTY WHATSOEVER AS TO THE DELIVERABLES IN ANY REGARDS WHATSOEVER, AND ACKNOWLEDGE THAT CRED-IQ MAKES NO, AND HEREBY DISCLAIMS ANY, REPRESENTATION, WARRANTY OR GUARANTEE THAT THE PURCHASE, USE OR COMMERCIALIZATION OF ANY DELIVERABLES WILL BE USEFUL TO YOU OR FREE FROM INTERFERENCE. BY ACCEPTANCE OF THE DELIVERABLES, YOU HEREBY RELEASE CRED-IQ AND ITS AFFILIATES AND AGENTS FROM ALL CLAIMS, DAMAGES AND LIABILITY ARISING HEREUNDER.

Most Common Workout Strategies by each of the Top Special Servicers

By

Michael Haas

-

September 20, 2024

0

This week, the CRED iQ research team addressed one of the most common topics requested by our readers: understanding workout strategies from the Special Servicers’ perspectives.

Building upon last week’s report, the objective of this study was to understand how the largest special servicers have addressed troubled loans so far this year. Our team examined ~1,800 loans comprising loan values of ~ $45 billion. Our analysis focused upon the top 6 special services: Rialto Capital, KeyBank, LNR Partners, CW Capital, Midland and Situs.

The results are quite diverse. Just over 21% of KeyBank’s loans were worked out via foreclosures, the highest percentage of all the top six special servicers. Foreclosure was the most deployed strategy (apart from TBD) at 14.9% of loans in all 6 special servicers.

REO strategies saw a high of 19.5% at LNR Partners. REO was the second highest strategy deployed at 10% (apart from TBD and Other).

Modifications saw a wide range from 6.4% at Rialto Capital to 20.3% of loans at CW Capital. Across all special servicers modifications was the third most common strategy deployed with 9% of all loans falling into that category.

Access Specially Serviced Loans

Loan extensions were achieved at 3 of the 6 special servicers and allocations were modest with Midland’s 5% at the top of the range. Full payoffs were achieved at 5 of the 6 firms, with Situs showing 5.6% of their loans reaching that mark—the category high.

Situs’s results are noteworthy with 79.3% of their loans in the TBD category—substantially higher than the other organizations. Clearly, we have a very limited view of the Situs portfolio’s ultimate outcomes as of this print. For that matter, all the special servicers in our study showed high percentages of TBD strategies (the lowest, CW Capital, at 33.9%).

The data utilized in our analysis is as of August 31, 2024.

Special Servicer Examples:

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

Announcing BMARK 2024-V10

By

Michael Haas

-

September 18, 2024

0

A CRED iQ Preliminary Analysis

DATA HEREIN PROVIDED TO CRED IQ IS FROM A PRELIMINARY PROSPECTUS AND MAY BE AMENDED OR SUPPLEMENTED PRIOR TO TIME OF SALE

Access Loan Details

Deal Overview

The BMARK 2024-V10 CMBS deal is a new issuance securitization for the CMBS market, with a total pooled balance of approximately $738.0M. The deal is jointly managed by prominent financial institutions Citigroup, Deutsche Bank, and Goldman Sachs. The deal is collateralized by 32 loans and secured by 62 properties across a variety of sectors, including mixed-use, multifamily, and office. The strategic geographic distribution of these properties ensures balanced exposure across major markets, thereby reducing regional risks and enhancing overall portfolio stability. The deal’s conservative underwriting practices are reflected in its weighted average loan-to-value (LTV) ratio of 55.8%, and the weighted average mortgage interest rate is 55.8%, which provides attractive returns for investors.

Key Metrics

The loan pool for BMARK 2024-V10 is structured to include a mix of amortizing and interest-only loans, with only 0.7% of the mortgage pool having scheduled amortization. The remainder of the pool (99.3%) consists of interest-only payments throughout the loan term, offering investors a steady income stream. The pool boasts a weighted average debt service coverage ratio (DSCR) of 1.71x, signifying strong cash flow relative to debt obligations and underscoring the financial robustness of the underlying properties. The weighted average net operating income (NOI) debt yield is 11.7%.

Geography & Property Types

A key strength of the BMARK 2024-V10 CMBS deal is its diverse property type distribution, which enhances portfolio resilience. Mixed Use constitutes 28.1% of the total balance, while multifamily and office properties account for 26.3% and 20.5%, respectively. The geographic distribution of the properties across prime markets, including high-growth areas in New York City, Los Angeles, and Honolulu further mitigates risk by reducing exposure to regional economic downturns.

Access Loan Details

About CRED iQ

CRED iQ is a market data provider that offers a robust suite of data and software solutions tailored for commercial real estate and finance professionals.

With over $2.3 trillion of CRE loans, CRED iQ delivers instant access to a comprehensive range of financial data and analytics for millions of properties in every market. CRED iQ’s data and analytical capabilities are instrumental in helping investors, lenders and brokers make informed and strategic decisions critical to their business.

THE DATA, INFORMATION AND/OR RELATED MATERAL (“DELIVERABLES”) IS BEING OFFERED AS-IS/WHERE-AS CONDITION. CRED-IQ MAKES NO REPRESENTATION OR WARRANTY AS TO QUALITY OR ACCURACY OF SUCH DELIVERABLES BEING PURCHASED, WHETHER EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, STATUTE, OR OTHERWISE, AND CRED-IQ SPECIFICALLY DISCLAIMS ANY AND ALL IMPLIED OR STATUTORY WARRANTIES INCLUDING WARRANTIES OF MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE, TECHNICAL PERFORMANCE, AND NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, YOU AS CUSTOMER ACKNOWLEDGE THAT YOU HAVE NOT AND ARE NOT RELYING UPON ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE, OR UPON ANY REPRESENTATION OR WARRANTY WHATSOEVER AS TO THE DELIVERABLES IN ANY REGARDS WHATSOEVER, AND ACKNOWLEDGE THAT CRED-IQ MAKES NO, AND HEREBY DISCLAIMS ANY, REPRESENTATION, WARRANTY OR GUARANTEE THAT THE PURCHASE, USE OR COMMERCIALIZATION OF ANY DELIVERABLES WILL BE USEFUL TO YOU OR FREE FROM INTERFERENCE. BY ACCEPTANCE OF THE DELIVERABLES, YOU HEREBY RELEASE CRED-IQ AND ITS AFFILIATES AND AGENTS FROM ALL CLAIMS, DAMAGES AND LIABILITY ARISING HEREUNDER.

Announcing BBCMS 2024-5C29

By

Michael Haas

-

September 17, 2024

0

A CRED iQ Preliminary Analysis

DATA HEREIN PROVIDED TO CRED IQ IS FROM A PRELIMINARY PROSPECTUS AND MAY BE AMENDED OR SUPPLEMENTED PRIOR TO TIME OF SALE

Access Loan Details

Deal Overview

The BBCMS 2024-5C29 CMBS deal is a new issuance securitization for the CMBS market, with a total pooled balance of approximately $1.07 billion. The deal is jointly managed by prominent financial institutions Barclays, BMO, Citigroup, Deutsche Bank, KeyBanc, Societe Generale, and UBS. The deal is collateralized by 55 loans and secured by 102 properties across a variety of sectors, including multifamily, retail, and industrial. The strategic geographic distribution of these properties ensures balanced exposure across major markets, thereby reducing regional risks and enhancing overall portfolio stability. The deal’s conservative underwriting practices are reflected in its weighted average loan-to-value (LTV) ratio of 58.3%, and the weighted average mortgage interest rate is 6.70%, which provides attractive returns for investors.

Key Metrics

The loan pool for BBCMS 2024-5C29 is structured to include a mix of amortizing and interest-only loans, with 10.0% of the mortgage pool having scheduled amortization, ensuring gradual principal repayment and enhanced cash flow stability. The remainder of the pool consists of interest-only payments throughout the loan term, offering investors a steady income stream. The pool boasts a weighted average debt service coverage ratio (DSCR) of 1.63x, signifying strong cash flow relative to debt obligations and underscoring the financial robustness of the underlying properties. The weighted average net operating income (NOI) debt yield is 11.5%.

Geography & Property Types

A key strength of the BBCMS 2024-5C29 CMBS deal is its diverse property type distribution, which enhances portfolio resilience. Multifamily properties, including garden, mid-rise, student housing and low-rise subtypes constitute 39.8% of the total balance, while retail properties account for 18.5% of the balance. The geographic distribution of the properties across prime markets, including high-growth areas in New York City, Boston, and Winston, NC further mitigates risk by reducing exposure to regional economic downturns.

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