Announcing BANK 2024-5YR10

By

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September 30, 2024

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

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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

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September 27, 2024

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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)

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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

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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

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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

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September 20, 2024

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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

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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

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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.

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.

Modifications and Foreclosures Continue to Grow — As Do Resolutions & Full Payoffs

By

Michael Haas

-

September 12, 2024

0

Troubled Loan Workout Strategies: A Special September Report

This week, our CRED iQ research team explored trends in workouts and resolutions for CRE securitized loans so far in 2024. This analysis included the workout strategies across CMBS, SBLL, CRE CLO and Freddie loans. Building upon our August report, our analysis compared the special servicer’s workout strategies from January 2024 with August 2024. Our previous report explored the period of December of 2023 to June 2024.

Our analysis compared workout strategies across $64.3 billion in loan balances (5,488 loans) in January of 2024 with $156.2 billion (6,351 loans) in August of 2024. The top 4 workout strategies used by special servicers from this dataset includes: 1) Successful Resolution 2) Foreclosure and 3) Modification or 4) or REO.

Perhaps the most striking metric is the January through August growth in full payoffs. From under a billion in January to $11.0 billion in August— full payoffs saw a massive 1,548.3% increase.

As we compare the January to the August data in other categories, maturity extensions and loan modifications, or the so called “extend and pretend” category continued to grow —rising 326.9% to $16.7 billion.

Foreclosures grew 272.6% in the period — reaching $19.2 billion in August.

After seeing a drop in REO in last month’s print (December 2023- June 2024 evaluation period), REO notched a 22% increase in this analysis, as July and August offset the previous drop.

Considering that resolved loans nearly doubled in the period (92.3%) to $55.9 billion while the full payoff category saw such explosive growth (1,548.3%) to $11.0 billion, there are positive trends represented in this analysis.

Notable Workout Example

The Coastland Center, a 468,926 SF regional mall in Naples, FL, is backed by a $96.0 million conduit loan. The loan transferred to the special servicer in July 2024 due to the upcoming August 2024 maturity date. Servicer commentary indicates a forbearance agreement was executed extending the maturity to May 2025.

Built in 1977 and renovated in 2007, the mall was appraised for $233.0 million ($508/sf) at origination in October 2012. The value of the asset has since decreased by 66.8% in February 2024 when it was appraised at $77.4 million ($169/SF). Coastland Center had a DSCR of 1.14 and was 96.0% occupied as of March 2024.

Sign Up for CRED iQ Today

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 2024-5C6

By

Michael Haas

-

September 9, 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 2024-5C6 CMBS deal is a new issuance securitization for the CMBS market, with a total pooled balance of approximately $675.2 million. The deal is jointly managed by prominent financial institutions BMO, Citigroup, Deutsche Bank, SG Americas, Goldman Sachs, and UBS. The deal is collateralized by 32 loans and secured by 46 properties across a variety of sectors, including multifamily, office, and retail. 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 58.7%, and the weighted average mortgage interest rate is 6.67%, which provides attractive returns for investors.

Key Metrics

The loan pool for BMO 2024-5C6 is structured to include a mix of amortizing and interest-only loans, with 3.9% of the mortgage pool having scheduled amortization, ensuring gradual principal repayment and enhanced cash flow stability. The remaining 96.1% 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 1.62x, signifying strong cash flow relative to debt obligations and underscoring the financial robustness of the underlying properties. Moreover, the weighted average net operating income (NOI) debt yield of 11.3% highlights the high earning potential of the assets, further reinforced by rigorous underwriting standards.

Geography & Property Types

A key strength of the BMO 2024-5C6 CMBS deal is its diverse property type distribution, which enhances portfolio resilience. Multifamily properties, including garden, mid-rise, independent living, and student housing subtypes constitute 28.9% of the total balance, while office properties account for 23.5% of the balance. The geographic distribution of the properties across prime markets, including high-growth areas in New York City, Boston, and Miami 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.

Overall Distress Rate Reaches a Sixth Straight Record High – Led By a 260 Basis Point Surge by Multifamily

By

Michael Haas

-

September 5, 2024

0

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.

The overall CRED iQ distress rate increased from 8.8% to 9.1% over the past month, achieving a sixth straight record high. CRED iQ’s special servicing rate came in flat month-over-month at 8.0%, while the CRED iQ delinquency rate increased by 66 basis points (reaching 6.8%) this month.

Segment Review

Multifamily continued its momentum rising to 11.0% from last month’s 8.4%, a dramatic 260 basis point increase in one month. Just eight months ago, that rate was 2.6%. The multifamily segment surpassed retail to secure the second highest level of distress among all CRE segments. These figures include all multifamily securitized with CMBS financing.

The office segment saw an increase in its distress rate in August–adding 80 basis points to 13.0% while maintaining its leadership as the sector with the highest overall distress level.

Retail improved by reducing its distress rate from 11.8% to 10.6% in this print—settling in at third place. The hotel segment added 60 basis points to 8.4%.

Uncharacteristically, the industrial segment saw a sharp increase from 0.8% to 4.6%–the largest increase of all property types. This increase is largely attributable to one SBLL portfolio valued at $2.18 billion (please see “Loan Highlight” below). Meanwhile, self-storage continued to perform with nearly zero distress – coming in at 0.1%.

Payment Status

Looking at distressed loan payment status, 31.7% of the loans are current – up significantly from last month’s 21.2%. 2.1% of loans are attributable to late (but in the grace period) and 3.6% of loans were late (but less than 30 days DQ). Combining these three metrics 37.4% of all loans were current / late within the grace period / less than 30 days delinquent.

Non-Performing Matured saw a reduction from 39.0% to 30.9%, as did 90+ Days Delinquent dropping from 14.2% to 10.9%. Performing Matured increased from 12.9% in July to 16.2% in August.

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.

As mentioned in our August report, our analysis exposes a meaningful gap between the distress and watchlist rates which could imply that the special serving & delinquency percentages may be likely to grow.

Loan Highlight

Nvip 1-15, a $2.18 billion ($133/SF) SBLL loan backed by a 138 industrial and office/flex property portfolio, defaulted this month after failing to payoff at maturity. The interest-only loan also has $1.96 billion ($119/SF) in additional debt. The loan has three, one-year maturity extension options representing a fully extended maturity of August 2027. Servicer commentary indicates the borrower provided written notice to exercise the first maturity extension option.

The 16.4 million SF portfolio consists of properties throughout six states: CA, FL, VA, TX, MD, and WA. The portfolio was 98.5% occupied and performing with a DSCR of 0.73. The collateral was valued at $4.2 billion ($256/SF) at underwriting in June 2022.

Sign Up for CRED iQ Today

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.

Top 50 Markets by CRED iQ Distress Metrics

By

Michael Haas

-

August 29, 2024

0

CRED iQ’s research team explored geographic distress trends across the United States in our latest research. We ran our analysis based upon current loan balances of all of the loans CRED iQ tracks within each market and then calculated the proportion of loans that are distressed.

Across the top 50 MSAs, our team calculated the CRED iQ Distress Rate for each market (which combines Delinquent and/or Specially Serviced loans). Charlotte logged the highest level of distress with 24.8% of their loans in distress, followed by Minneapolis (23.6%), San Francisco (20.1%), Trenton (17.6%) and Tulsa (16.3%) – rounding out the top 5 MSAs with the highest levels of distress. To provide perspective, the overall distress rate for all loans across every market was 8.8% as of July 2024.

Some of the strongest performing MSAs in the top 50 include Tampa operating at 2.6% distress today, while Orange County, Riverside, Nashville and Austin operating under 3%.

Among the scope of distressed loans in our analysis, a number are quite noteworthy including a $152.3 million loan backed by the 539,813 SF Northlake Mall in the Charlotte market. The loan transferred to the special servicer in November 2019 due to balloon payment default. The loan is non-performing matured as it only paid through November 2022.

The regional mall is in the North Charlotte submarket is 72.4% occupied. The property was valued at $253.0M at underwriting in September, 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.

Access Full Distressed Loan Level Data

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.