Suburban Office Lease Expirations

August 16, 2022

This week, CRED iQ calculated updated valuations for five suburban office properties that have major tenants with lease expirations in the next six months. Featured leases include suburban office space in the Chicago, San Jose, and New York City MSAs. Lease expirations are opportunities for tenant reps to source prospects and find solutions for clients. Additionally, lease expirations can serve as a preemptive signal of distress for commercial real estate loans if prospective leasing the newly vacant space is low.

CRED iQ valuations factor in a base-case (most likely), a downside (significant loss of tenants), and dark scenarios (100% vacant). For access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and borrower contact information, sign up for a free trial here.

3500 Lacey Road

583,982 sf, Suburban Office, Downers Grove, IL [View Details]

HAVI Group has a 158,612-sf lease that is scheduled to expire on August 31, 2022 at 3500 Lacey Road, a 583,982-sf office building located in Downers Grove, IL. HAVI’s lease was originally set to expire in April 2025, but the tenant terminated its lease effective for the end of August 2022. The lease termination was related to HAVI Group’s affiliation as a vendor for McDonald’s, which moved its headquarters to the Fulton Market submarket of Chicago in 2018. HAVI Group will follow McDonald’s into Fulton Market with a new 100,000-sf lease at a nearby property.

HAVI Group leases approximately 27% of the NRA at 3500 Lacey Road, also known as Esplanade II. The office building secures an $85.8 million loan that has a maturity date in December 2029. With the departure of HAVI Group, occupancy is expected to decline to 62% from 89%. However, HAVI Group had been subletting two portions of its space. Hearthside Food Solutions had been subleasing 17,696 sf and appears to still be operational at the building. Donnelly Financial Solutions had been subleasing 22,132 sf from HAVI Group but no longer appears to have a presence at the building. As such, CRED iQ’s base-case occupancy assumption is approximately 65%, assuming that the sublease with Hearthside Food Solutions converts into a direct lease. For the valuation report and loan-level details, click here.

3500 Lacey Road – BMARK 2020-B16 | BMARK 2020-B17

Property Name	3500 Lacey Road
Address	^{3500 Lacey Road Downers Grove, IL 60515}
Loan Balance	$85,800,000
Interest Rate	4.35%
Maturity Date	12/1/2029
Most Recent Appraisal	$129,000,000 ($221/sf)
Most Recent Appraisal Date	9/3/2019
CRED iQ Base-Base Value	Requires Log In

Campbell Technology Park

280,864-sf, Suburban Office, Campbell, CA [View Details]

Dialog Semiconductor has a 44,884-sf lease that is scheduled to expire on August 31, 2022 at Campbell Technology Park, a 280,864-sf office park located in Campbell, CA. Dialog Semiconductor is the property’s largest tenant, accounting for 16% of the NRA. The tenant was acquired by Renesas Electronics Corporation and appears to be vacating at lease expiration to consolidate operations. CRED iQ anticipates that the departure will leave the property 49% occupied.

The four-building office park secures a $60 million loan that matures in June 2025. Inclusive of Dialog Semiconductor, there was a total of 32% of the property’s NRA that was slated to expire in 2022. Occupancy at the property was approximately 76% in 2019 and 2020 and declined to 65% in 2021. The declines are troubling indicator of the property’s inability to attract replacement tenants. For the valuation report and loan-level details, click here.

Campbell Technology Park – WFCM 2015-NXS2

Property Name	Campbell Technology Park
Address	^{635 – 695 Campbell Technology Parkway Campbell, CA 95008}
Loan Balance	$60,000,000
Interest Rate	4.41%
Maturity Date	6/11/2025
Most Recent Appraisal	$100,000,000 ($356/sf)
Most Recent Appraisal Date	4/21/2015
CRED iQ Base-Base Value	Requires Log In

777 Westchester Avenue

124,108 sf, Office, White Plains, NY [View Details]

Sabra Dipping Company has a 36,345-sf lease that is scheduled to expire on September 30, 2022 at 777 Westchester Avenue, a 124,108-sf office building in White Plains, NY. The tenant will not renew after signing a 6,655-sf lease at the Gateway Building, which is more centrally located to the White Plains central business district than 777 Westchester Avenue. Sabra accounts for approximately 29% of the NRA at 777 Westchester Avenue. After the tenant’s relocation and downsize, occupancy at the property declined to approximately 67%.

The property at 777 Westchester Avenue is part of a five-building portfolio of adjacent office buildings that secure a $53.4 million mortgage. Prior to Sabra’s decision to vacate, the property had the highest occupancy of all five buildings. The portfolio totals over 671,000 sf with a weighted average occupancy of 65%. With nearly 235,000 sf of vacant space across the five-building office park, leasing activity may prove to be challenging not only for 777 Westchester but for the entire portfolio. For the valuation report and loan-level details, click here.

Westchester Office Portfolio – GSMS 2016-GS4

Property Name	777 Westchester
Address	^{777 Westchester Avenue White Plains, NY 10604}
Allocated Loan Amount	$11,041,881
Interest Rate	4.46%
Maturity Date	11/6/2026
Most Recent Appraisal	$19,000,000 ($153/sf)
Most Recent Appraisal Date	9/8/2016
CRED iQ Base-Base Value	Requires Log In

3100 Research Blvd

313,575 sf, Suburban Office, Kettering, OH [View Details]

Vivial Media Holdings has a 60,026-sf lease that expires on December 31, 2022 at 3100 Research Boulevard, a 313,575-sf office building located in suburban Dayton, OH. Vivial Media was acquired by Thryv Inc. in January 2022. As part of the acquisition, CRED iQ expects Thryv to consolidate operations, with consideration for the firm’s established presence in the Dayton market with other subsidiaries.

Vivial Media’s lease accounts for 19% of the property’s GLA. Accounting for the tenant’s departure, occupancy at the property would decline to 51% from 70%. Additionally, the General Services Administration (GSA) leases 65,471 sf space, equal to 21% of NRA, on behalf of Defense Acquisition University through a lease that expires on November 30, 2022. The GSA is the property’s largest tenant and a renewal is needed to avoid further distress. The property secures a $10 million loan that matures in December 2030. For the valuation report and loan-level details, click here.

Property Name	3100 Research Blvd
Address	^{3100 Research Blvd Kettering, OH 45420}
Loan Balance	$10,000,000
Interest Rate	3.60%
Maturity Date	12/1/1930
Most Recent Appraisal	$15,500,000 ($49/sf)
Most Recent Appraisal Date	8/2/2020
CRED iQ Base-Base Value	Requires Log In

Spruce Street Professional Building

75,204 sf, Suburban Office, Riverside, CA [View Details]

National University has a 13,907-sf lease that is scheduled to expire on December 31, 2022 at the Spruce Street Professional Building, a 75,204-sf office building in Riverside, CA. According to the Department of Education, National University closed its location at the property in March 2020. The vacant space will need to be re-tenanted.

The Spruce Street Professional building secures a $9 million loan that matures in May 2027. The property was 90% occupied as of year-end 2021 but National University’s lease expiration will lower occupancy to 71.5%. For the valuation report and loan-level details, click here.

Spruce Street Professional Building – GSMS 2017-GS6

Property Name	Spruce Street Professional Building
Address	^{1325 Spruce Street Riverside, CA 92507}
Loan Balance	$9,037,958
Interest Rate	4.80%
Maturity Date	5/6/2027
Most Recent Appraisal	$12,100,000 ($161/sf)
Most Recent Appraisal Date	3/23/2017
CRED iQ Base-Base Value	Requires Log In

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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. Our data platform is powered by over $2.0 trillion of CMBS, CRE CLO, SBLL, and GSE Agency loan and property data.

CMBS – July 2022 Loan Dispositions and Payoffs

CRED iQ

August 8, 2022

CMBS conduit and SBLL transactions incurred approximately $163 million in realized losses during July 2022 via the workout of distressed assets. CRED iQ identified 14 workouts classified as dispositions, liquidations, or discounted payoffs in July 2022. Of those 14 total workouts, half of the assets were resolved without a loss. Of the seven workouts resulting in losses, severities for the month of July ranged from 2% to 91.5%, based on outstanding balances at disposition. In total, realized losses in July were more than double the amount of realized losses in June. On a monthly basis, realized losses for CMBS conduit and SBLL transactions averaged approximately $137.8 million year-to-date.

Lodging properties accounted for half of the total number of distressed CMBS workouts this month, although only three of the loans secured by lodging properties incurred losses. Other property types with multiple distressed workouts included three distressed retail properties and two distressed mixed-use properties.

The liquidation of Koger Center represented the largest loss, by dollar amount and loss severity, among all distressed workouts this month. The liquidation alone accounted for 58% of the total realized losses for the month. Koger Center, an 854,944-sf multi-building suburban office campus in Tallahassee, FL, had been in special servicing since October 2019 and was auctioned in May 2022. Outstanding debt for the asset totaled $103.3 million and July’s liquidation resulted in a loss severity of 91.5% based on the balance at disposition.

Another notable distressed workout was The Mall at Stonecrest, which took over nine years to resolve. The 397,655-sf portion of a regional mall located 20 miles outside of Atlanta, GA secured $89.8 million in outstanding debt. A discounted payoff of the debt, funded by GeenLake Asset Management, resulted in a loss severity of 59% for the loan.

Excluding defeased loans, there was approximately $4.7 billion in securitized debt that was paid off or liquidated in July, which was a sharp decline compared to $7.8 billion in June 2022. In July, 7% of the loan resolutions were categorized as dispositions, liquidations, or discounted payoffs. The percentage of distressed workouts was 5% in the previous month. Approximately 12% of the loans were paid off with prepayment penalties.

By property type, office had the highest total of outstanding debt pay off in July with 35% of the total by balance. Among the largest payoffs was a pair of loans secured by Manhattan office towers. A $275.3 million mortgage secured by the HSBC Tower in Midtown and a $197.8 million loan secured by 100 Church Street in Lower Manhattan both paid off at maturity on July 1, 2022.

About CRED iQ

CRED iQ is a commercial real estate data, analytics, and valuation platform designed to unlock investment, financing, and leasing opportunities. CRED iQ provides real-time property, loan, tenant, ownership, and valuation data for over $2.0 trillion of commercial real estate.

CRED-iQ-CMBS-July-2022-Dispositions-and-Payoffs Download

Market Delinquency Tracker – August 2022

CRED iQ

August 4, 2022

CRED iQ monitors distressed rates and market performance for nearly 400 MSAs across the United States, covering over $900 billion in outstanding commercial real estate (CRE) debt. Distressed rates (DQ + SS%) include loans that are specially serviced, delinquent, or a combination of both. Distressed rates and month-over-month changes for the month of July 2022 are presented below for the 50 largest MSAs, broken out by property type for a granular view of distress by market-sector.

Of the 50 largest MSAs tracked by CRED iQ, there were 33 with month-over-month increases in the percentage of distressed CRE loans within the CMBS universe. This is a reversal from trends over the past several months when the majority of Top 50 MSAs exhibited consecutive delinquency improvements. Despite the comparatively high number of markets with increases in distressed rates this month, the scale of those increases was relatively modest. The Baltimore MSA (+1.38%) had the highest month-over-month increase. New Orleans (+1.12%) was the only other market to exhibit an increase in distress greater than 1% in July 2022.

Exploring market delinquencies by property type, the Healthcare sector for Kansas City, MO exhibited the highest increase in distress by market-sector with a +10.4% change compared to June 2022. The increase was led by a $21.2 million floating-rate loan secured by The Atriums, a 207-unit assisted living facility. The loan defaulted at maturity on July 1, 2022 and subsequently transferred to special servicing. Additionally, a $25 million loan, secured by two properties in Metairie, LA — Independence Plaza and 3530 Houma Boulevard — became 30 days delinquent in July and contributed to elevated increases in distress in the New Orleans – Mixed Use and Office sectors.

Of the largest decreases in distress, the Baltimore – Mixed Use market-sector exhibited the most significant change, which was driven by the resolution of the $67.8 million Gallery at Harborplace loan. The loan failed to pay off at maturity in May 2022, when it contributed to a spike in distress for the Baltimore market. However, the loan appears to have been paid off in full during the July 2022 reporting period, alleviating the temporary increase in distress. Additionally, the $22.6 million Gatli n Retail Portfolio loan returned to the master servicer this month, which corresponded to decreases in distress for two retail markets – Detroit and Jacksonville.

The Minneapolis MSA has the highest overall distressed rate at 20.9%, which was an Market Delinquency Tracker August 2022 increase compared to the prior month distressed rate of 20.1%. Milwaukee (10.0%), Hartford, CT (9.2%), Cleveland (7.6%), and Chicago (5.7%) comprise the next four markets with the highest rates of distress. Louisville dropped out of the Top 5 distressed markets this month after it was supplanted by Chicago. The Sacramento market (0.1%) had the lowest percentage of distress among the Top 50 MSAs for the fourth consecutive month. The Jacksonville (0.3%) market moved into position as the market with the second-lowest percentage of distress.

For the full CRED DQ Report, download here:

The-CRED-DQ-Market-Delinquency-Tracker-August-2022 Download

MSA – Property Type	DQ/SS (millions)	DS/SS (%)	Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA	$170.3	5.5%	0.3%
Allentown – Hotel	$16.2	53.8%	0.0%
Allentown – Industrial	$64.9	4.3%	0.0%
Allentown – Multifamily	$34.9	5.6%	0.0%
Allentown – Office	$06.7	2.4%	3.1%
Allentown – Other	$0.0	0.0%	0.0%
Allentown – Retail	$32.5	8.5%	-0.2%
Allentown – Self Storage	$15.1	17.1%	0.0%
Atlanta – Atlanta-Sandy Springs-Marietta, GA MSA	$3,056.9	11.2%	0.4%
Atlanta – Hotel	$916.9	46.5%	0.6%
Atlanta – Industrial	$275.6	19.7%	-1.2%
Atlanta – Multifamily	$801.7	5.3%	0.0%
Atlanta – Office	$359.4	16.6%	0.0%
Atlanta – Other	$378.2	8.8%	0.0%
Atlanta – Retail	$295.7	13.8%	3.6%
Atlanta – Self Storage	$29.4	9.1%	0.0%
Austin – Austin-Round Rock, TX MSA	$1,330.1	14.3%	0.5%
Austin – Hotel	$237.7	31.4%	-0.5%
Austin – Industrial	$125.1	65.3%	0.0%
Austin – Multifamily	$582.2	9.3%	0.1%
Austin – Office	$96.2	12.9%	0.1%
Austin – Other	$172.0	40.1%	0.6%
Austin – Retail	$106.4	12.4%	3.9%
Austin – Self Storage	$10.4	14.3%	0.0%
Baltimore – Baltimore-Towson, MD MSA	$1,088.8	13.0%	1.4%
Baltimore – Hotel	$170.6	41.6%	5.2%
Baltimore – Industrial	$54.0	23.1%	0.0%
Baltimore – Multifamily	$339.3	5.9%	0.8%
Baltimore – Office	$119.3	22.2%	3.3%
Baltimore – Other	$117.8	43.2%	-31.7%
Baltimore – Retail	$276.8	27.4%	10.7%
Baltimore – Self Storage	$11.1	10.1%	0.0%
Birmingham – Birmingham-Hoover, AL MSA	$640.6	23.5%	0.8%
Birmingham – Hotel	$41.1	40.8%	0.0%
Birmingham – Industrial	$265.7	87.9%	0.0%
Birmingham – Multifamily	$77.9	7.7%	0.0%
Birmingham – Office	$47.8	9.7%	0.7%
Birmingham – Other	$03.1	16.5%	0.0%
Birmingham – Retail	$200.0	28.1%	0.0%
Birmingham – Self Storage	$05.0	6.1%	-1.0%
Boston – Boston-Cambridge-Quincy, MA-NH MSA	$1,559.3	9.8%	0.1%
Boston – Hotel	$367.6	22.8%	0.1%
Boston – Industrial	$105.0	32.7%	0.0%
Boston – Multifamily	$475.8	10.2%	0.0%
Boston – Office	$258.3	5.9%	0.0%
Boston – Other	$197.2	6.2%	0.0%
Boston – Retail	$119.0	7.4%	0.8%
Boston – Self Storage	$36.3	21.4%	0.0%
Bridgeport – Bridgeport-Stamford-Norwalk, CT MSA	$1,002.4	25.7%	0.5%
Bridgeport – Hotel	$08.0	8.9%	9.5%
Bridgeport – Industrial	$14.3	14.1%	0.0%
Bridgeport – Multifamily	$95.7	4.8%	0.0%
Bridgeport – Office	$468.9	46.4%	0.4%
Bridgeport – Other	$191.6	53.6%	0.3%
Bridgeport – Retail	$215.5	77.2%	0.0%
Bridgeport – Self Storage	$08.6	15.2%	0.0%
Charlotte – Charlotte-Gastonia-Concord, NC-SC MSA	$1,455.5	18.8%	-1.0%
Charlotte – Hotel	$472.1	52.4%	0.0%
Charlotte – Industrial	$68.7	24.1%	0.0%
Charlotte – Multifamily	$226.6	5.2%	0.0%
Charlotte – Office	$387.0	42.5%	-3.1%
Charlotte – Other	$19.7	8.0%	4.3%
Charlotte – Retail	$276.7	27.4%	-9.0%
Charlotte – Self Storage	$04.7	10.1%	0.0%
Chicago – Chicago-Naperville-Joliet, IL-IN-WI MSA	$5,288.7	17.9%	-0.6%
Chicago – Hotel	$822.1	28.3%	1.6%
Chicago – Industrial	$366.1	10.0%	0.0%
Chicago – Multifamily	$1,118.0	11.8%	-0.3%
Chicago – Office	$1,452.7	18.6%	-1.3%
Chicago – Other	$662.0	25.7%	-0.3%
Chicago – Retail	$758.2	26.9%	-4.2%
Chicago – Self Storage	$109.7	33.8%	0.0%
Cincinnati – Cincinnati-Middletown, OH-KY-IN MSA	$577.3	15.7%	0.5%
Cincinnati – Hotel	$84.1	34.6%	7.2%
Cincinnati – Industrial	$32.1	13.1%	0.0%
Cincinnati – Multifamily	$100.7	5.4%	0.0%
Cincinnati – Office	$220.9	44.8%	0.0%
Cincinnati – Other	$78.4	28.7%	0.4%
Cincinnati – Retail	$60.3	11.6%	0.3%
Cincinnati – Self Storage	$0.8	1.5%	0.0%
Cleveland – Cleveland-Elyria-Mentor, OH MSA	$821.0	20.7%	-0.8%
Cleveland – Hotel	$74.4	45.3%	-3.5%
Cleveland – Industrial	$33.9	19.9%	0.0%
Cleveland – Multifamily	$144.4	8.7%	0.0%
Cleveland – Office	$63.7	7.7%	-4.9%
Cleveland – Other	$195.6	48.2%	1.1%
Cleveland – Retail	$307.2	43.8%	0.1%
Cleveland – Self Storage	$01.7	3.9%	-1.8%
Columbus, OH – Columbus, OH MSA	$564.2	7.9%	0.4%
Columbus, OH – Hotel	$101.9	33.9%	2.1%
Columbus, OH – Industrial	$13.3	3.4%	-0.1%
Columbus, OH – Multifamily	$219.4	4.6%	0.0%
Columbus, OH – Office	$21.8	3.4%	1.2%
Columbus, OH – Other	$36.3	12.8%	0.0%
Columbus, OH – Retail	$158.3	21.5%	-1.4%
Columbus, OH – Self Storage	$13.4	47.8%	0.0%
Dallas – Dallas-Fort Worth-Arlington, TX MSA	$4,648.8	13.9%	0.0%
Dallas – Hotel	$1,414.8	43.2%	-0.1%
Dallas – Industrial	$226.4	16.7%	0.0%
Dallas – Multifamily	$1,533.3	7.2%	0.0%
Dallas – Office	$735.6	23.4%	0.4%
Dallas – Other	$194.8	10.0%	0.1%
Dallas – Retail	$466.2	22.3%	-0.8%
Dallas – Self Storage	$72.4	19.8%	0.0%
Denver – Denver-Aurora, CO MSA	$2,195.9	13.6%	0.2%
Denver – Hotel	$493.7	62.9%	0.1%
Denver – Industrial	$36.7	6.7%	0.0%
Denver – Multifamily	$478.6	4.6%	0.0%
Denver – Office	$350.7	17.0%	-0.1%
Denver – Other	$101.0	10.5%	0.3%
Denver – Retail	$720.4	54.0%	0.0%
Denver – Self Storage	$14.8	8.0%	0.0%
Detroit – Detroit-Warren-Livonia, MI MSA	$1,261.2	14.3%	-0.8%
Detroit – Hotel	$395.3	60.5%	-0.8%
Detroit – Industrial	$117.6	20.7%	0.0%
Detroit – Multifamily	$242.0	6.8%	-0.2%
Detroit – Office	$248.7	15.1%	0.0%
Detroit – Other	$92.1	11.8%	0.6%
Detroit – Retail	$132.6	10.2%	-5.1%
Detroit – Self Storage	$32.9	11.1%	0.0%
Hartford – Hartford-West Hartford-East Hartford, CT MSA	$355.9	14.6%	-2.5%
Hartford – Hotel	$29.3	24.7%	6.2%
Hartford – Industrial	$08.4	18.2%	0.0%
Hartford – Multifamily	$62.8	3.9%	0.0%
Hartford – Office	$199.0	71.7%	-30.4%
Hartford – Other	$14.9	17.1%	0.0%
Hartford – Retail	$34.2	11.8%	7.8%
Hartford – Self Storage	$07.4	32.8%	0.0%
Houston – Houston-Sugar Land-Baytown, TX MSA	$3,662.4	15.5%	0.6%
Houston – Hotel	$329.5	31.6%	2.0%
Houston – Industrial	$149.9	24.7%	-0.8%
Houston – Multifamily	$1,232.3	8.8%	0.1%
Houston – Office	$967.0	29.6%	1.2%
Houston – Other	$233.5	33.7%	2.3%
Houston – Retail	$693.1	18.4%	0.1%
Houston – Self Storage	$57.0	18.7%	0.0%
Indianapolis – Indianapolis-Carmel, IN MSA	$864.3	16.4%	0.0%
Indianapolis – Hotel	$232.6	40.0%	1.0%
Indianapolis – Industrial	$47.8	7.7%	0.0%
Indianapolis – Multifamily	$286.2	10.3%	-0.3%
Indianapolis – Office	$166.2	27.1%	-0.4%
Indianapolis – Other	$41.7	14.8%	-0.2%
Indianapolis – Retail	$72.5	21.7%	0.0%
Indianapolis – Self Storage	$17.3	25.4%	0.0%
Jacksonville – Jacksonville, FL MSA	$544.5	9.9%	-0.1%
Jacksonville – Hotel	$115.9	30.6%	0.3%
Jacksonville – Industrial	$04.8	2.4%	0.0%
Jacksonville – Multifamily	$198.8	5.3%	0.0%
Jacksonville – Office	$59.2	11.3%	0.0%
Jacksonville – Other	$36.5	18.0%	0.0%
Jacksonville – Retail	$119.9	31.0%	-1.7%
Jacksonville – Self Storage	$09.4	13.3%	0.0%
Kansas City – Kansas City, MO-KS MSA	$1,126.9	20.3%	0.6%
Kansas City – Hotel	$172.2	60.7%	1.3%
Kansas City – Industrial	$0.0	0.0%	0.0%
Kansas City – Multifamily	$266.9	9.6%	-0.4%
Kansas City – Office	$288.8	27.2%	0.0%
Kansas City – Other	$40.5	19.8%	10.4%
Kansas City – Retail	$201.5	34.1%	3.1%
Kansas City – Self Storage	$157.0	81.0%	0.0%
Las Vegas – Las Vegas-Paradise, NV MSA	$2,153.0	10.4%	0.1%
Las Vegas – Hotel	$998.8	13.2%	0.0%
Las Vegas – Industrial	$49.0	11.7%	0.0%
Las Vegas – Multifamily	$140.3	2.1%	0.0%
Las Vegas – Office	$63.5	8.3%	0.0%
Las Vegas – Other	$113.5	14.1%	0.0%
Las Vegas – Retail	$776.1	18.0%	0.3%
Las Vegas – Self Storage	$11.7	5.9%	0.0%
Los Angeles – Los Angeles-Long Beach-Santa Ana, CA MSA	$7,897.5	15.1%	-0.2%
Los Angeles – Hotel	$1,935.0	30.0%	-2.2%
Los Angeles – Industrial	$224.3	6.0%	0.0%
Los Angeles – Multifamily	$1,404.6	6.7%	0.0%
Los Angeles – Office	$1,936.7	18.1%	0.1%
Los Angeles – Other	$760.8	24.7%	1.1%
Los Angeles – Retail	$1,565.2	23.9%	-0.5%
Los Angeles – Self Storage	$70.9	8.1%	0.0%
Louisville – Louisville/Jefferson County, KY-IN MSA	$381.1	14.5%	-2.8%
Louisville – Hotel	$112.0	73.9%	0.0%
Louisville – Industrial	$07.8	3.7%	0.0%
Louisville – Multifamily	$102.9	7.1%	-0.2%
Louisville – Office	$31.7	10.9%	0.0%
Louisville – Other	$27.6	36.4%	0.0%
Louisville – Retail	$82.6	19.3%	-16.5%
Louisville – Self Storage	$16.3	41.5%	0.0%
Memphis – Memphis, TN-AR-MS MSA	$429.4	18.2%	0.6%
Memphis – Hotel	$78.3	41.3%	1.5%
Memphis – Industrial	$58.2	27.5%	0.0%
Memphis – Multifamily	$44.5	3.7%	0.0%
Memphis – Office	$35.2	14.4%	0.0%
Memphis – Other	$02.2	6.5%	16.0%
Memphis – Retail	$166.7	51.2%	1.1%
Memphis – Self Storage	$44.2	28.4%	0.0%
Miami – Miami-Fort Lauderdale-Pompano Beach, FL MSA	$2,937.9	11.4%	-0.6%
Miami – Hotel	$1,061.6	21.0%	-0.6%
Miami – Industrial	$18.5	4.5%	0.0%
Miami – Multifamily	$349.4	3.3%	-0.3%
Miami – Office	$405.5	15.9%	0.0%
Miami – Other	$264.8	15.0%	0.0%
Miami – Retail	$786.3	15.8%	-2.6%
Miami – Self Storage	$51.8	9.4%	0.0%
Milwaukee – Milwaukee-Waukesha-West Allis, WI MSA	$383.1	15.2%	-0.1%
Milwaukee – Hotel	$46.1	33.1%	0.1%
Milwaukee – Industrial	$26.4	9.0%	0.0%
Milwaukee – Multifamily	$55.1	5.9%	0.0%
Milwaukee – Office	$91.9	17.2%	0.1%
Milwaukee – Other	$67.6	52.6%	0.0%
Milwaukee – Retail	$94.4	20.0%	-2.0%
Milwaukee – Self Storage	$01.6	11.9%	0.0%
Minneapolis – Minneapolis-St. Paul-Bloomington, MN-WI MSA	$1,227.9	14.5%	0.8%
Minneapolis – Hotel	$208.7	32.5%	-0.5%
Minneapolis – Industrial	$37.3	9.2%	0.0%
Minneapolis – Multifamily	$269.0	9.5%	0.0%
Minneapolis – Office	$332.0	15.0%	0.3%
Minneapolis – Other	$229.5	45.6%	0.0%
Minneapolis – Retail	$99.8	5.5%	2.6%
Minneapolis – Self Storage	$51.6	73.2%	0.0%
Nashville – Nashville-Davidson-Murfreesboro-Franklin, TN MSA	$1,093.2	18.0%	0.2%
Nashville – Hotel	$428.0	31.8%	0.2%
Nashville – Industrial	$101.2	33.6%	0.0%
Nashville – Multifamily	$240.9	7.8%	0.0%
Nashville – Office	$170.1	35.5%	0.0%
Nashville – Other	$19.8	50.8%	0.0%
Nashville – Retail	$128.0	17.3%	0.0%
Nashville – Self Storage	$05.1	5.6%	0.0%
New Orleans – New Orleans-Metairie-Kenner, LA MSA	$1,263.0	37.8%	1.1%
New Orleans – Hotel	$720.2	73.9%	0.3%
New Orleans – Industrial	$0.5	1.3%	0.0%
New Orleans – Multifamily	$192.3	21.8%	0.0%
New Orleans – Office	$105.1	19.8%	3.1%
New Orleans – Other	$28.2	19.0%	10.0%
New Orleans – Retail	$203.3	30.6%	0.1%
New Orleans – Self Storage	$13.4	12.7%	0.0%
New York City – New York-Northern New Jersey-Long Island, NY-NJ-PA MSA	$20,821.1	16.2%	-0.1%
New York City – Hotel	$1,310.5	38.6%	-2.0%
New York City – Industrial	$239.2	5.9%	-0.3%
New York City – Multifamily	$6,877.0	19.8%	-0.1%
New York City – Office	$4,717.7	10.0%	-0.3%
New York City – Other	$4,599.3	19.2%	-0.3%
New York City – Retail	$2,797.0	22.8%	0.5%
New York City – Self Storage	$280.4	8.9%	0.0%
Orlando – Orlando-Kissimmee, FL MSA	$2,392.5	22.6%	0.3%
Orlando – Hotel	$1,900.2	67.2%	0.2%
Orlando – Industrial	$04.5	2.6%	0.0%
Orlando – Multifamily	$137.3	2.4%	0.0%
Orlando – Office	$68.2	14.9%	0.3%
Orlando – Other	$54.6	12.6%	0.0%
Orlando – Retail	$192.7	20.4%	1.0%
Orlando – Self Storage	$35.1	31.5%	0.0%
Philadelphia – Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA	$2,617.8	12.9%	0.2%
Philadelphia – Hotel	$467.0	59.1%	1.1%
Philadelphia – Industrial	$61.8	2.1%	0.0%
Philadelphia – Multifamily	$471.7	5.1%	0.1%
Philadelphia – Office	$481.7	13.6%	1.4%
Philadelphia – Other	$570.6	43.8%	0.1%
Philadelphia – Retail	$484.3	22.8%	0.1%
Philadelphia – Self Storage	$80.6	23.3%	0.0%
Phoenix – Phoenix-Mesa-Scottsdale, AZ MSA	$1,334.1	6.9%	-0.1%
Phoenix – Hotel	$509.8	34.2%	0.2%
Phoenix – Industrial	$75.6	5.1%	0.0%
Phoenix – Multifamily	$279.1	2.5%	0.0%
Phoenix – Office	$172.5	7.6%	0.0%
Phoenix – Other	$124.1	15.5%	0.0%
Phoenix – Retail	$152.6	9.2%	-1.6%
Phoenix – Self Storage	$20.6	6.1%	0.0%
Pittsburgh – Pittsburgh, PA MSA	$789.3	16.8%	-0.2%
Pittsburgh – Hotel	$120.5	75.1%	5.0%
Pittsburgh – Industrial	$38.7	32.3%	0.0%
Pittsburgh – Multifamily	$159.1	7.2%	0.0%
Pittsburgh – Office	$140.1	12.9%	-1.3%
Pittsburgh – Other	$179.0	46.0%	-1.9%
Pittsburgh – Retail	$151.7	24.8%	0.0%
Pittsburgh – Self Storage	$0.3	0.2%	0.0%
Portland – Portland-Vancouver-Beaverton, OR-WA MSA	$1,118.9	16.0%	0.4%
Portland – Hotel	$320.7	37.4%	0.7%
Portland – Industrial	$108.9	36.8%	0.0%
Portland – Multifamily	$237.1	5.4%	-0.2%
Portland – Office	$70.0	17.5%	0.1%
Portland – Other	$335.6	67.6%	0.0%
Portland – Retail	$36.2	7.3%	0.0%
Portland – Self Storage	$10.4	18.1%	0.0%
Raleigh – Raleigh-Cary, NC MSA	$437.1	11.4%	0.2%
Raleigh – Hotel	$101.2	55.7%	2.3%
Raleigh – Industrial	$37.1	31.6%	0.0%
Raleigh – Multifamily	$192.7	7.3%	0.0%
Raleigh – Office	$72.6	15.1%	0.0%
Raleigh – Other	$0.0	0.0%	4.5%
Raleigh – Retail	$31.3	12.9%	0.0%
Raleigh – Self Storage	$02.3	4.8%	0.0%
Richmond – Richmond, VA MSA	$567.7	17.1%	0.2%
Richmond – Hotel	$102.9	40.9%	0.0%
Richmond – Industrial	$15.5	8.9%	0.0%
Richmond – Multifamily	$31.4	2.0%	0.0%
Richmond – Office	$201.2	29.8%	0.0%
Richmond – Other	$0.0	0.0%	0.0%
Richmond – Retail	$179.7	38.3%	0.8%
Richmond – Self Storage	$36.9	67.9%	0.0%
Riverside – Riverside-San Bernardino-Ontario, CA MSA	$879.5	8.6%	0.2%
Riverside – Hotel	$40.4	10.2%	-1.0%
Riverside – Industrial	$21.3	0.9%	0.0%
Riverside – Multifamily	$124.0	3.2%	0.0%
Riverside – Office	$112.0	17.5%	0.0%
Riverside – Other	$49.7	14.5%	0.0%
Riverside – Retail	$500.0	24.4%	0.1%
Riverside – Self Storage	$32.0	7.2%	0.0%
Sacramento – Sacramento-Arden-Arcade-Roseville, CA MSA	$516.4	9.4%	0.0%
Sacramento – Hotel	$198.9	63.3%	0.4%
Sacramento – Industrial	$19.8	2.8%	0.0%
Sacramento – Multifamily	$82.7	3.0%	0.0%
Sacramento – Office	$126.9	15.9%	0.0%
Sacramento – Other	$41.7	10.7%	0.0%
Sacramento – Retail	$46.4	9.9%	0.0%
Sacramento – Self Storage	$0.1	0.1%	0.0%
Salt Lake City – Salt Lake City, UT MSA	$420.4	10.6%	0.1%
Salt Lake City – Hotel	$86.1	36.7%	2.3%
Salt Lake City – Industrial	$33.7	18.5%	0.0%
Salt Lake City – Multifamily	$91.6	5.0%	0.0%
Salt Lake City – Office	$89.0	17.6%	0.0%
Salt Lake City – Other	$113.1	20.7%	0.0%
Salt Lake City – Retail	$06.9	1.1%	0.0%
Salt Lake City – Self Storage	$0.0	0.0%	0.0%
San Antonio – San Antonio, TX MSA	$619.0	10.1%	0.1%
San Antonio – Hotel	$141.0	55.1%	0.0%
San Antonio – Industrial	$48.4	29.2%	0.0%
San Antonio – Multifamily	$270.5	6.1%	-0.2%
San Antonio – Office	$39.3	10.7%	0.0%
San Antonio – Other	$0.0	0.0%	0.0%
San Antonio – Retail	$92.6	15.6%	0.3%
San Antonio – Self Storage	$27.2	17.5%	0.0%
San Diego – San Diego-Carlsbad-San Marcos, CA MSA	$1,479.0	12.4%	-0.3%
San Diego – Hotel	$656.8	35.2%	-0.8%
San Diego – Industrial	$28.1	5.8%	0.0%
San Diego – Multifamily	$113.7	1.8%	-0.1%
San Diego – Office	$240.4	16.8%	0.0%
San Diego – Other	$187.0	29.2%	-2.7%
San Diego – Retail	$253.0	21.9%	0.0%
San Diego – Self Storage	$0.1	0.1%	0.0%
San Francisco – San Francisco-Oakland-Fremont, CA MSA	$5,292.2	21.7%	0.1%
San Francisco – Hotel	$1,667.6	82.2%	1.5%
San Francisco – Industrial	$44.5	6.5%	0.0%
San Francisco – Multifamily	$1,315.6	17.7%	0.0%
San Francisco – Office	$1,454.3	14.2%	0.0%
San Francisco – Other	$455.8	18.3%	0.0%
San Francisco – Retail	$296.2	25.6%	-0.5%
San Francisco – Self Storage	$58.2	15.7%	0.0%
San Jose – San Jose-Sunnyvale-Santa Clara, CA MSA	$2,484.9	13.0%	-0.3%
San Jose – Hotel	$499.0	7.9%	-0.8%
San Jose – Industrial	$0.0	0.0%	0.0%
San Jose – Multifamily	$266.1	7.4%	0.0%
San Jose – Office	$900.1	12.1%	0.0%
San Jose – Other	$612.5	64.2%	0.0%
San Jose – Retail	$196.3	34.0%	0.0%
San Jose – Self Storage	$10.9	27.7%	0.0%
Seattle – Seattle-Tacoma-Bellevue, WA MSA	$2,805.4	13.3%	0.0%
Seattle – Hotel	$896.4	70.0%	1.2%
Seattle – Industrial	$33.5	0.7%	0.0%
Seattle – Multifamily	$839.4	10.7%	-0.1%
Seattle – Office	$469.2	11.6%	0.0%
Seattle – Other	$312.8	26.4%	0.0%
Seattle – Retail	$233.8	15.6%	0.0%
Seattle – Self Storage	$20.2	10.5%	0.0%
St. Louis – St. Louis, MO-IL MSA	$782.6	19.2%	0.6%
St. Louis – Hotel	$172.1	76.9%	2.8%
St. Louis – Industrial	$20.4	11.8%	0.0%
St. Louis – Multifamily	$240.0	13.9%	-0.2%
St. Louis – Office	$27.0	5.7%	0.0%
St. Louis – Other	$226.2	45.5%	-2.1%
St. Louis – Retail	$92.2	9.9%	0.4%
St. Louis – Self Storage	$04.7	10.2%	0.0%
Tampa – Tampa-St. Petersburg-Clearwater, FL MSA	$895.6	9.5%	0.2%
Tampa – Hotel	$229.5	34.0%	-0.8%
Tampa – Industrial	$30.8	16.7%	0.0%
Tampa – Multifamily	$146.6	2.2%	1.3%
Tampa – Office	$76.6	11.7%	0.0%
Tampa – Other	$109.7	27.4%	0.0%
Tampa – Retail	$271.1	34.9%	0.3%
Tampa – Self Storage	$31.3	18.6%	0.0%
Tucson – Tucson, AZ MSA	$436.9	13.2%	0.7%
Tucson – Hotel	$84.5	25.2%	0.0%
Tucson – Industrial	$0.0	0.0%	0.0%
Tucson – Multifamily	$154.6	9.0%	0.0%
Tucson – Office	$10.7	18.8%	0.0%
Tucson – Other	$11.6	6.3%	0.0%
Tucson – Retail	$175.4	21.3%	-0.1%
Tucson – Self Storage	$0.0	0.0%	0.0%
Virginia Beach – Virginia Beach-Norfolk-Newport News, VA-NC MSA	$484.8	10.4%	-1.3%
Virginia Beach – Hotel	$79.1	18.9%	-2.0%
Virginia Beach – Industrial	$25.0	8.1%	0.0%
Virginia Beach – Multifamily	$67.1	2.6%	0.0%
Virginia Beach – Office	$161.7	42.9%	0.0%
Virginia Beach – Other	$52.7	34.9%	0.0%
Virginia Beach – Retail	$75.0	10.0%	-8.8%
Virginia Beach – Self Storage	$24.3	30.3%	0.0%
Washington, DC – Washington-Arlington-Alexandria, DC-VA-MD-WV MSA	$3,820.4	13.3%	0.1%
Washington, DC – Hotel	$567.2	57.6%	2.7%
Washington, DC – Industrial	$39.1	6.6%	0.0%
Washington, DC – Multifamily	$973.6	6.5%	0.0%
Washington, DC – Office	$1,406.4	19.6%	-0.8%
Washington, DC – Other	$361.1	22.6%	0.1%
Washington, DC – Retail	$438.4	13.2%	0.0%
Washington, DC – Self Storage	$34.6	15.7%	0.0%
Grand Total	$100,976.6	14.5%	0.0%

About CRED iQ

Specially Serviced Loans – July 2022

CRED iQ

August 2, 2022

CRED iQ’s special servicing rate for CMBS conduit and SASB transactions declined to 4.47% in July 2022, compared to 4.64% in June 2022. Despite the month-over-month decline, loans totaling nearly $200 million transferred to the special servicer during the July reporting period.

In this week’s Weekly Asset Review (WAR Report), CRED iQ highlights five distressed properties that have transferred to special servicing in June and July 2022. Featured properties include a lodging property located in the Cayman Islands, a mixed-use property outside of Los Angeles, CA, and a pair of ground floor retail spaces in Manhattan, NY.

Marriott Grand Cayman

295 keys, Full-Service Hotel, Grand Cayman, KY [View Details]

This $74.3 million loan transferred to the special servicer after a maturity default on July 1, 2022. The loan is secured by a 295-key full-service waterfront resort located on Seven Mile Beach in Grand Cayman. The property was severely impacted by disruptions in international travel starting in early 2020 and the ensuing slow recovery of the tourism industry in the Cayman Islands. However, the loan remained current, without modification or forbearance, throughout COVID-related disruptions. Average occupancy at the resort was reported as 5% during 2021. Corresponding to minimal occupancy, the property had an operating deficit greater than $5 million during 2021. In the last year of stabilization the property generated net cash flow of approximately $13.6 million. Rising interest rates coupled with the absence of stabilized hotel operations likely contributed to the maturity default. Mitigating concern, the collateral property is located in a market with a strategic location and high barriers to entry. For a valuation report and loan-level details, click here.

Marriott Grand Cayman (CCUBS 2017-C1 | UBSCM 2017-C5 | GSMS 2017-GS7)

Property Name	Marriott Grand Cayman
Address	^{389 West Bay Road Grand Cayman, KY1-1202}
Outstanding Balance	$74,270,353
Interest Rate	5.45%
Maturity Date	7/6/2022
Most Recent Appraisal	$142,000,000 ($481,356/key)
Most Recent Appraisal Date	5/4/2017

West Covina Village

220,000 sf, Mixed-Use (Retail/Office), West Covina, CA [View Details]

This $36 million loan transferred to special servicing on July 8, 2022 due to delinquency. The loan initially became delinquent in June and remained over four months delinquent as of July. The loan is secured by a 220,000-sf retail and office property located in West Covina, CA, approximately 20 miles east of Los Angeles. The retail portion of the property is grocery-anchored by Stater Bros. Markets, which occupies 16% of the property’s NRA. The office portion of the property is occupied by UEI College, which is a for-profit vocational school that occupies 16% of the property’s GLA.

LA Fitness was the third-largest tenant at the property but vacated in late-2021. Prior to its closure, LA Fitness operated the space as Esporta Fitness, which was the gym’s answer to low price offerings from Planet Fitness. The tenant occupied 13% of the property’s GLA but paid significantly higher rent than other tenants, accounting for approximately 24% of the property’s base rent. A November 2021 lease termination allowed LA Fitness to vacate ahead of its scheduled lease expiration in November 2026. The departure of the tenant left the property approximately 80% occupied. For a valuation report and loan-level details, click here.

Property Name	West Covina Village
Address	^{301-477 North Azusa Avenue West Covina, CA 91791}
Outstanding Balance	$36,000,000
Interest Rate	5.44%
Maturity Date	12/6/2028
Most Recent Appraisal	$61,600,000 ($280/sf)
Most Recent Appraisal Date	10/8/2018

58-60 Ninth Avenue and 69 Gansevoort Street

13,250 sf, Mixed-Use (Retail/Multifamily), New York NY [View Details]

These two properties located in the Meatpacking District of Manhattan, NY transferred to special servicing on July 1, 2022 due to imminent monetary default. The properties secure a $28 million mortgage that is scheduled to mature on August 6, 2022, indicating an impending maturity default likely also contributed to the loan’s transfer to the special servicer.

The property at 58-60 Ninth Avenue is a four-story building with 10,300-sf with 6,800 sf of retail space and three multifamily units. The retail space was formerly occupied by Free People pursuant to a lease that was scheduled to expire in January 2027. However, the retailer stopped paying rent in early 2020 and the loan sponsor, Delshah Capital, terminated the lease after missed rent payments. For a valuation report and loan-level details, click here.

Property Name	58-60 Ninth Avenue
Address	^{58-60 Ninth Avenue New York, NY 10011}
Allocated Loan Amount	$19,500,000
Interest Rate	4.25%
Maturity Date	8/6/2022
Most Recent Appraisal	$36,800,000 ($3,573/sf)
Most Recent Appraisal Date	6/7/2017

The property at 69 Gansevoort Street is a single-tenant 2,950-sf retail space that was formerly occupied by Madewell. The tenant rejected its lease through bankruptcy proceeds and vacated in August 2020. Similar to the Free People lease, Madewell’s lease was scheduled to expire in January 2027. A long-term replacement tenant does not appear to have been found. For a valuation report and loan-level details, click here.

Property Name	69 Gansevoort Street
Address	^{69 Gansevoort Street New York, NY 10014}
Allocated Loan Amount	$8,500,000
Interest Rate	4.25%
Maturity Date	8/6/2022
Most Recent Appraisal	$17,100,000 ($5,797/sf)
Most Recent Appraisal Date	6/7/2017

4141 N Scottsdale

147,864 sf, Office, Scottsdale, AZ [View Details]

CRED iQ last highlighted this property in a November 2021 Weekly Asset Review report, detailing the anticipated departure of the property’s largest tenant, Aetna. The tenant, which used the space for its Coventry Health Care operations, vacated at lease expiration in December 2021. Aetna accounted for 73% of the property’s NRA. The property secures a $24.9 million mortgage that is scheduled to mature in February 2025. The loan transferred to special servicing on June 21, 2022 due to delinquency. Comments from the special servicer stated that the borrower is under contract to sell the property and is in the process of defeasing the loan. For a valuation report and loan-level details, click here.

Property Name	4141 N Scottsdale
Address	^{4141 N Scottsdale Road Scottsdale, AZ 85251}
Outstanding Balance	$24,903,900
Interest Rate	4.11%
Maturity Date	2/6/2025
Most Recent Appraisal	$36,100,000 ($244/sf)
Most Recent Appraisal Date	11/20/2014

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About CRED iQ

August 2022 Delinquency Report

CRED iQ

July 28, 2022

*DQ = All delinquent CMBS loans in the conduit and SASB universe, including specially serviced and non-specially serviced loans*
*SS = All specially serviced CMBS loans in the conduit and SASB universe, including current, delinquent and REO*
*DQ + SS = All distressed CMBS loans in the conduit and SASB universe that are delinquent, specially serviced, or a combination of both*

The CRED iQ delinquency rate for CMBS declined by 37 bps during the July 2022 remittance period. Overall delinquency has continuously declined since June 2020 when the rate was at its COVID-induced high of 10.66%. This month, the delinquency rate, equal to the percentage of all delinquent specially serviced loans and delinquent non-specially serviced loans, for CRED iQ’s sample universe of $500+ billion in CMBS conduit and single asset single-borrower (SASB) loans was 2.93%, which compares to last month’s rate of 3.30%. CRED iQ’s special servicing rate, equal to the percentage of CMBS loans that are with the special servicer (delinquent and non-delinquent), declined month-over month to 4.47% from 4.64%. The CMBS special servicing rate has declined for eight consecutive months. Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 4.83% of CMBS loans that are specially serviced, delinquent, or a combination of both. The overall distressed rate declined compared to the prior month rate of 4.95%. These distressed rates typically track slightly higher than special servicing rates as most delinquent loans are also with the special servicer.

By property type, the delinquency rate declined in July across all sectors with delinquency cures totaling over $2 billion by outstanding balance. Delinquency cures were led by loans secured by lodging properties. The lodging sector exhibited the sharpest month-over-month decline in delinquency with a rate of 4.34%, which was 58% lower than the prior month. More than half of the loans with delinquency cures in July, based on outstanding balance, were secured by hotels. One of the largest lodging delinquency cures was the $134.5 million Marriott LAX loan, which is secured by a 1,004-room hotel adjacent to the Los Angeles International Airport. The loan has had issues staying current after a February 2022 modification agreement but returned to the master servicer in June 2022 after nearly a year and a half in special servicing.

A pair of maturity defaults were highlights among newly delinquent loans in July. First, a $57.5 million loan secured by a 575,359-sf portion of the Greenwood Mall in Bowling Green, KY failed to pay off on its July 5, 2022 maturity date. Updated servicer commentary indicated loan sponsor Brookfield Property Partners was in the process of a sale of the loan collateral. Second, a $25.4 million loan secured by 989 Sixth Avenue — a 105,555-sf office building in Midtown Manhattan, NY — failed to pay off at maturity on July 10, 2022. The property’s performance has been hampered by low occupancy, which was most recently reported as 40% as of December 2021.

Special servicing rates also declined across all major property types this month, although the velocities of the declines were more subdued than delinquency improvements. The majority of special servicing cures were loans secured by lodging properties. The lodging special servicing rate declined to 7.49%, compared to 7.72% in the previous month. One of the largest special serving cures during the July remittance period was the $155 million Hilton Garden Inn W 54th Street loan, secured by a 401-key hotel in Manhattan, NY that was temporarily closed for a short time due to COVID. The loan transferred to special servicing in May 2020 but returned to the master servicer in June 2022.

*DQ + SS = All distressed CMBS loans in the conduit and SASB universe that are delinquent, specially serviced, or a combination of both*

CRED iQ’s CMBS distressed rate (DQ + SS%) by property type accounts for loans that qualify for either delinquent or special servicing subsets. This month, overall distressed rates for all property types declined. The distressed rate for retail was the highest by property type for the fourth consecutive month with a rate of 9.18%. Two of the more notable loans added to the distressed category this month, both via transfers to special servicing, were West Covina Village — a $36 million loan secured by a 220,00-sf mixed-use (retail/office) property in West Covina, CA — and 4141 N Scottsdale — a $24.9 million loan secured by a 147,864-sf office building in Scottsdale, AZ. For additional information about these two loans, click View Details below:

	[View Details]	[View Details]
Loan	West Covina Village	4141 N Scottsdale
Balance	$36,000,000	$24,903,900
Special Servicer Transfer Date	7/8/2022	6/21/2022

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Q2 2022 CMBS Auction Recap

CRED iQ

July 14, 2022

Properties and mortgage notes securing more than $300 million in outstanding CMBS debt were auctioned during Q2 2022, according to CRED iQ’s observations of impending losses for investors. The volume of CMBS auctions during Q2 2022 increased compared to Q1 2022 when 30 auctions tied to approximately $217 million in CMBS debt took place. Sales through an auction can take two to three months to close; however, sale transactions can be delayed or even fail to close after a due diligence process. Of the 30 auctions from the previous quarter, there were nine auctioned assets backing $68.3 million in CMBS debt that remained unresolved as of the June 2022 reporting period.

CRED iQ monitored 28 individual CMBS property and note sales through their respective auction processes during Q2 2022. A little more than half of those auctions, 15 in total, involved distressed sales facilitated by a special servicer. Of the 15 specially serviced assets, there were 10 REO properties with titles that transferred to respective CMBS trusts. Special servicers are tasked with liquidating these properties, sometimes after a period of stabilization, for maximum proceeds on behalf of CMBS certificate holders.

Of the 10 REO properties that were auctioned, the average holding period between title acquisition and auction date was approximately 2.1 years. The shortest holding period was three months, and the longest holding period was nearly six years. The quickest sale from REO title date to auction date was the 181,285-sf mixed-use (office/retail) property in Fort Worth, TX known as The Tower. The property transferred to special servicing in June 2021, shortly after a major tenant terminated its lease causing occupancy to fall to 48%. The special servicer acquired title on behalf of the CMBS trust in January 2022 and the property was auctioned three months later in April 2022. The property was reportedly sold for less than the asset’s $18.4 million outstanding debt amount. Additionally, net proceeds available to the CMBS trust will likely come in lower than the asset’s sale price to account for the repayment of servicer advances, interest on servicer advances, and other liquidation expenses.

By deal vintage, auctions over the past three months were most prevalent among 2014 and 2016 vintage securitizations. Comparing to the prior quarter, 2015 vintage securitizations had the most auction activity. Similar to the previous quarter, hotels represented the majority of auctions with 15 attempted sales during Q2 2022. By market, the assets that were auctioned were geographically disperse. Only three MSAs had exposure to multiple asset auctions — Chicago, Cleveland, and New York.

CRED iQ observed insights into pricing discovery for properties that resulted from assets’ final bids. The majority of the Q2 2022 auctioned CMBS properties, approximately 70%, were appraised in 2020 or later. Excluding assets with pre-2020 appraisals, we found that 55% of the auctioned assets received final bids that were higher than most recent appraisals. One notable final bid premium over a recent appraisal was the Hilton Garden Inn Shreveport; the 142-key hotel had a final bid that was greater than 100% of its February 2022 appraisal.

When properties traded at a discount to the most recent appraisal, the average difference was approximately -24%. The most severe discount from appraisal to final bid, equal to approximately -54%, was Commerce Park IV and V, a 229,459-sf office property in the Cleveland, OH MSA. The property was liquidated during the June 2022 remittance period, resulting in a $10.4 million principal loss to CMBS certificate holders.

In summary, the average difference between final bid prices and most recent appraisals was approximately +18%. Isolating for specially serviced assets resulted in a smaller average difference of +8%. Lodging properties, on average, exhibited the highest positive difference (+47%) and office properties exhibited the highest average deficit between final bids and recent appraisals (-37%). Concerning lodging properties, many hotels were last appraised in 2020 or early-2021, which was during the immediate ascension of COVID-related disruptions when cash flows were severely impacted. Many of those reduced valuations may not have been reflective of current hotel operations if substantial recoveries in occupancy and average daily rates had occurred. As for office properties, results may be reflective of perceived property type risk for lower-tier office buildings in an environment where space availability is rising across markets and firms are continuing to shed office space.

For access to the underlying data behind this research, please contact us: team@cred-iq.com.

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CMBS – June 2022 Loan Dispositions and Payoffs

CRED iQ

July 12, 2022

CMBS conduit and SBLL transactions incurred approximately $80 million in realized losses during June 2022 through the workout of distressed assets. CRED iQ identified 21 workouts classified as dispositions, liquidations, or discounted payoffs in June 2022. Additionally, there were two distressed loans securitized in Freddie K transactions that needed workouts, though neither workout resulted in a principal loss to either trust. Of those 23 total workouts, there were 11 distressed assets that were resolved without a loss. Of the 12 workouts resulting in losses, severities for the month of June ranged from less than 1% to 100%, based on outstanding balances at disposition. In total, realized losses in June were significantly lower than May; although, May realized loss totals were the outlier on the high end through year-to-date 2022. March and April 2022 realized loss totals averaged approximately $80 million, in line with this month’s total.

Retail and lodging properties accounted for 83% of the total number of distressed CMBS workouts this month. There were 10 retail workouts and nine lodging workouts. Approximately 75% of realized losses in June were associated with retail properties.

The liquidation of Florence Mall represented the largest loss, by dollar amount, among all distressed workouts this month. The property was formerly owned by Brookfield Property Partners but the firm agreed to a deed-in-lieu of foreclosure in January 2021 after the loan transferred to special servicing in July 2020. After a nearly two-year workout, the loan was resolved with a 52.5% loss severity, resulting in $47 million in principal losses to CMBS certificate holders.

There was only one distressed workout of an office property in June, but the disposition was notable. Commerce Park IV and V consisted of two REO office buildings located in suburban Cleveland, OH. The properties had been in special servicing since January 2019 due to declines in occupancy. Occupancy issues did not improve in subsequent years and the buildings became REO in March 2021. Outstanding debt for the properties totaled approximately $12.5 million at disposition and Commerce Park IV and V were liquidated with a $10.4 million principal loss to CMBS certificate holders, equal to an 83% severity.

Excluding defeased loans, there was approximately $7.8 billion in securitized debt that was paid off or liquidated in June, which was higher than $5.2 billion in May 2022. In June, 5% of the loan resolutions were categorized as dispositions, liquidations, or discounted payoffs, which was significantly lower than the prior month. An additional 10% of the loans paid off with prepayment penalties.

By property type, lodging had the highest total of outstanding debt pay off in June. The high volume of lodging payoffs was driven by the retirement of a $1.38 billion mortgage secured by the 3,027-key Cosmopolitan of Las Vegas. Blackstone sold the resort and casino in May 2022 for $5.65 billion in a transaction that allows the firm to retain partial ownership and transfers operations to MGM Resorts, among other details.

About CRED iQ

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Market Delinquency Tracker – July 2022

CRED iQ

July 7, 2022

CRED iQ monitors distressed rates and market performance for nearly 400 MSAs across the United States, covering over $900 billion in outstanding commercial real estate (CRE) debt. Distressed rates (DQ + SS%) include loans that are specially serviced, delinquent, or a combination of both. Distressed rates and month-over-month changes for the month of June 2022 are presented below for the 50 largest MSAs, broken out by property type for a granular view of distress by market-sector.

Of the 50 largest MSAs tracked by CRED iQ, there were 43 with month-over-month improvements in the percentage of distressed CRE loans within the CMBS universe. New Orleans (-9.57%)and Louisville (-3.41%) were among the MSAs with the sharpest declines this month. Seven of the 50 largest MSAs exhibited month-over-month increases in distress, including Charlotte (+1.15%) and Virginia Beach (+1.12%) with the sharpest increases in distress in June 2022.

Hotel and retail were the property types that contributed the most to the many improvements in distressed rates across the Top 50 MSAs. Loans secured by lodging and retail properties accounted for the 10 largest declines in distress by market-sector. This included the lodging sectors for New Orleans and Detroit as well as the retail sectors for Tampa and Cincinnati.

One of the largest distressed loans to be cured this month was the $325 million commercial mortgage secured by the 1,193-key Hyatt Regency New Orleans. The loan transferred to special servicing in July 2020 due to pandemic-related disruptions to operations but returned to the master servicer on May 17, 2022 after a March 2022 loan modification. The New Orleans market was one of the first to experience widespread distress at the onset of the pandemic and the cure of this loan is a positive step to a recovery, particularly for the lodging market if collateral performance can continue to improve and be maintained.

The Minneapolis MSA has the highest overall distressed rate at 20.1%, which was a slight decline compared to the prior month distressed rate of 22.1%. Hartford, CT (11.7%), Milwaukee (10.13%), Cleveland (8.37%), and Louisville (6.86%) comprise the remaining markets with the highest rates of distress. New Orleans, which has consistently been among the markets with the highest distressed rates, dropped out of the Top 5 this month after the cure of the Hyatt Regency New Orleans. The Sacramento market (0.1%) had the lowest percentage of distress among the Top 50 MSAs for the third consecutive month. The Raleigh, NC (0.33%) market had the second-lowest percentage of distress.

For the full CRED iQ Market Delinquency Tracker Report, download here:

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MSA – Property Type	DQ/SS (millions)	DS/SS (%)	Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA	$78.0	2.2%	-0.3%
Allentown – Hotel	$0.0	0.0%	0.0%
Allentown – Industrial	$0.0	0.0%	0.0%
Allentown – Multifamily	$0.0	0.0%	0.0%
Allentown – Office	$58.9	18.2%	2.5%
Allentown – Other	$0.0	0.0%	0.0%
Allentown – Retail	$19.2	5.2%	0.1%
Allentown – Self Storage	$0.0	0.0%	0.0%
Atlanta – Atlanta-Sandy Springs-Marietta, GA MSA	$437.5	1.4%	-0.9%
Atlanta – Hotel	$145.0	6.8%	-1.3%
Atlanta – Industrial	$17.9	1.2%	0.0%
Atlanta – Multifamily	$02.7	0.0%	0.0%
Atlanta – Office	$56.3	2.6%	0.7%
Atlanta – Other	$0.2	0.0%	0.0%
Atlanta – Retail	$215.5	9.9%	-6.9%
Atlanta – Self Storage	$0.0	0.0%	0.0%
Austin – Austin-Round Rock, TX MSA	$136.9	1.3%	0.1%
Austin – Hotel	$56.9	6.5%	-1.0%
Austin – Industrial	$0.0	0.0%	0.0%
Austin – Multifamily	$34.9	0.5%	-0.1%
Austin – Office	$21.8	2.8%	2.8%
Austin – Other	$08.4	1.8%	0.9%
Austin – Retail	$14.9	1.8%	0.1%
Austin – Self Storage	$0.0	0.0%	0.0%
Baltimore – Baltimore-Towson, MD MSA	$399.2	3.8%	-0.7%
Baltimore – Hotel	$50.5	10.6%	-7.5%
Baltimore – Industrial	$0.0	0.0%	0.0%
Baltimore – Multifamily	$08.2	0.1%	0.0%
Baltimore – Office	$51.9	7.4%	-0.8%
Baltimore – Other	$147.3	36.0%	11.4%
Baltimore – Retail	$141.4	14.2%	-4.1%
Baltimore – Self Storage	$0.0	0.0%	0.0%
Birmingham – Birmingham-Hoover, AL MSA	$117.0	3.4%	-0.7%
Birmingham – Hotel	$0.0	0.0%	0.0%
Birmingham – Industrial	$0.0	0.0%	0.0%
Birmingham – Multifamily	$0.0	0.0%	0.0%
Birmingham – Office	$95.8	18.7%	0.0%
Birmingham – Other	$0.0	0.0%	0.0%
Birmingham – Retail	$20.3	2.8%	-0.1%
Birmingham – Self Storage	$0.9	1.0%	-2.3%
Boston – Boston-Cambridge-Quincy, MA-NH MSA	$113.8	0.6%	-0.1%
Boston – Hotel	$26.8	1.6%	-0.1%
Boston – Industrial	$0.0	0.0%	0.0%
Boston – Multifamily	$0.0	0.0%	0.0%
Boston – Office	$0.0	0.0%	0.0%
Boston – Other	$0.0	0.0%	0.0%
Boston – Retail	$87.0	4.8%	-3.2%
Boston – Self Storage	$0.0	0.0%	0.0%
Bridgeport – Bridgeport-Stamford-Norwalk, CT MSA	$150.9	3.3%	-0.8%
Bridgeport – Hotel	$38.0	32.7%	-9.2%
Bridgeport – Industrial	$0.0	0.0%	0.0%
Bridgeport – Multifamily	$0.0	0.0%	0.0%
Bridgeport – Office	$103.0	9.8%	0.6%
Bridgeport – Other	$09.8	2.5%	0.0%
Bridgeport – Retail	$0.0	0.0%	0.0%
Bridgeport – Self Storage	$0.0	0.0%	0.0%
Charlotte – Charlotte-Gastonia-Concord, NC-SC MSA	$280.4	3.3%	1.1%
Charlotte – Hotel	$90.6	10.0%	2.5%
Charlotte – Industrial	$0.0	0.0%	0.0%
Charlotte – Multifamily	$0.0	0.0%	0.0%
Charlotte – Office	$21.3	3.1%	3.1%
Charlotte – Other	$85.0	30.4%	0.0%
Charlotte – Retail	$83.5	9.3%	9.2%
Charlotte – Self Storage	$0.0	0.0%	0.0%
Chicago – Chicago-Naperville-Joliet, IL-IN-WI MSA	$2,081.5	6.3%	0.2%
Chicago – Hotel	$818.9	26.0%	-0.9%
Chicago – Industrial	$0.0	0.0%	0.0%
Chicago – Multifamily	$107.5	0.9%	0.8%
Chicago – Office	$648.1	7.6%	0.1%
Chicago – Other	$219.3	8.4%	4.0%
Chicago – Retail	$287.8	9.3%	-0.5%
Chicago – Self Storage	$0.0	0.0%	0.0%
Cincinnati – Cincinnati-Middletown, OH-KY-IN MSA	$116.8	2.6%	-2.7%
Cincinnati – Hotel	$87.6	28.8%	-2.6%
Cincinnati – Industrial	$0.0	0.0%	0.0%
Cincinnati – Multifamily	$0.0	0.0%	0.0%
Cincinnati – Office	$0.0	0.0%	0.0%
Cincinnati – Other	$06.9	2.1%	-0.4%
Cincinnati – Retail	$22.3	4.0%	-13.4%
Cincinnati – Self Storage	$0.0	0.0%	0.0%
Cleveland – Cleveland-Elyria-Mentor, OH MSA	$357.8	8.4%	-0.2%
Cleveland – Hotel	$68.7	37.6%	5.9%
Cleveland – Industrial	$0.0	0.0%	0.0%
Cleveland – Multifamily	$0.0	0.0%	0.0%
Cleveland – Office	$114.7	13.0%	1.4%
Cleveland – Other	$170.2	42.0%	-4.0%
Cleveland – Retail	$03.5	0.5%	-0.4%
Cleveland – Self Storage	$0.8	1.8%	-0.2%
Columbus, OH – Columbus, OH MSA	$208.3	2.4%	-0.6%
Columbus, OH – Hotel	$71.8	21.7%	-2.6%
Columbus, OH – Industrial	$11.8	3.1%	-0.2%
Columbus, OH – Multifamily	$0.0	0.0%	-0.3%
Columbus, OH – Office	$04.4	0.7%	-1.2%
Columbus, OH – Other	$0.0	0.0%	0.0%
Columbus, OH – Retail	$120.4	16.2%	0.6%
Columbus, OH – Self Storage	$0.0	0.0%	0.0%
Dallas – Dallas-Fort Worth-Arlington, TX MSA	$327.3	0.8%	0.0%
Dallas – Hotel	$113.0	3.2%	0.7%
Dallas – Industrial	$01.7	0.1%	0.0%
Dallas – Multifamily	$0.0	0.0%	0.0%
Dallas – Office	$115.0	3.3%	0.1%
Dallas – Other	$23.4	1.1%	0.0%
Dallas – Retail	$74.1	3.4%	0.0%
Dallas – Self Storage	$0.0	0.0%	0.0%
Denver – Denver-Aurora, CO MSA	$227.4	1.2%	-0.2%
Denver – Hotel	$23.0	2.8%	-0.3%
Denver – Industrial	$0.0	0.0%	0.0%
Denver – Multifamily	$0.0	0.0%	0.0%
Denver – Office	$120.0	6.1%	0.3%
Denver – Other	$66.5	6.6%	-0.3%
Denver – Retail	$17.9	1.3%	0.0%
Denver – Self Storage	$0.0	0.0%	0.0%
Detroit – Detroit-Warren-Livonia, MI MSA	$219.5	2.2%	-0.4%
Detroit – Hotel	$81.2	11.7%	-12.6%
Detroit – Industrial	$0.0	0.0%	0.0%
Detroit – Multifamily	$06.5	0.2%	0.2%
Detroit – Office	$0.0	0.0%	0.0%
Detroit – Other	$22.0	2.2%	-0.4%
Detroit – Retail	$109.8	7.4%	3.8%
Detroit – Self Storage	$0.0	0.0%	0.0%
Hartford – Hartford-West Hartford-East Hartford, CT MSA	$337.9	11.7%	0.9%
Hartford – Hotel	$56.0	40.8%	-9.0%
Hartford – Industrial	$0.0	0.0%	0.0%
Hartford – Multifamily	$0.0	0.0%	0.0%
Hartford – Office	$123.3	34.0%	22.2%
Hartford – Other	$0.0	0.0%	0.0%
Hartford – Retail	$158.5	46.7%	-0.5%
Hartford – Self Storage	$0.0	0.0%	0.0%
Houston – Houston-Sugar Land-Baytown, TX MSA	$1,004.3	3.6%	-0.6%
Houston – Hotel	$483.7	40.6%	-2.8%
Houston – Industrial	$04.2	0.8%	0.0%
Houston – Multifamily	$14.7	0.1%	0.0%
Houston – Office	$405.2	11.6%	-0.6%
Houston – Other	$0.0	0.0%	0.0%
Houston – Retail	$96.5	2.5%	0.0%
Houston – Self Storage	$0.0	0.0%	0.0%
Indianapolis – Indianapolis-Carmel, IN MSA	$209.5	3.6%	0.2%
Indianapolis – Hotel	$75.4	12.0%	3.9%
Indianapolis – Industrial	$0.0	0.0%	0.0%
Indianapolis – Multifamily	$48.7	1.5%	-0.2%
Indianapolis – Office	$74.8	12.0%	0.0%
Indianapolis – Other	$04.9	2.0%	0.3%
Indianapolis – Retail	$05.7	1.7%	0.2%
Indianapolis – Self Storage	$0.0	0.0%	0.0%
Jacksonville – Jacksonville, FL MSA	$22.8	0.3%	-0.1%
Jacksonville – Hotel	$13.9	3.3%	-0.4%
Jacksonville – Industrial	$0.0	0.0%	0.0%
Jacksonville – Multifamily	$0.0	0.0%	0.0%
Jacksonville – Office	$0.0	0.0%	0.0%
Jacksonville – Other	$0.0	0.0%	0.0%
Jacksonville – Retail	$08.9	2.2%	0.0%
Jacksonville – Self Storage	$0.0	0.0%	0.0%
Kansas City – Kansas City, MO-KS MSA	$112.0	1.9%	-0.1%
Kansas City – Hotel	$80.4	27.0%	2.0%
Kansas City – Industrial	$0.0	0.0%	0.0%
Kansas City – Multifamily	$11.4	0.4%	0.2%
Kansas City – Office	$0.0	0.0%	0.0%
Kansas City – Other	$0.0	0.0%	0.0%
Kansas City – Retail	$20.2	3.3%	0.1%
Kansas City – Self Storage	$0.0	0.0%	0.0%
Las Vegas – Las Vegas-Paradise, NV MSA	$235.1	1.0%	-0.1%
Las Vegas – Hotel	$0.0	0.0%	0.0%
Las Vegas – Industrial	$0.0	0.0%	0.0%
Las Vegas – Multifamily	$0.0	0.0%	0.0%
Las Vegas – Office	$0.0	0.0%	0.0%
Las Vegas – Other	$0.0	0.0%	0.0%
Las Vegas – Retail	$235.1	5.2%	-0.1%
Las Vegas – Self Storage	$0.0	0.0%	0.0%
Los Angeles – Los Angeles-Long Beach-Santa Ana, CA MSA	$673.7	1.1%	-0.4%
Los Angeles – Hotel	$294.8	4.3%	-1.0%
Los Angeles – Industrial	$0.0	0.0%	0.0%
Los Angeles – Multifamily	$20.2	0.1%	0.0%
Los Angeles – Office	$06.7	0.1%	0.0%
Los Angeles – Other	$57.8	1.7%	-1.0%
Los Angeles – Retail	$294.2	4.3%	-0.7%
Los Angeles – Self Storage	$0.0	0.0%	0.0%
Louisville – Louisville/Jefferson County, KY-IN MSA	$230.7	6.9%	-3.4%
Louisville – Hotel	$0.0	0.0%	0.0%
Louisville – Industrial	$0.0	0.0%	0.0%
Louisville – Multifamily	$03.7	0.2%	0.2%
Louisville – Office	$0.0	0.0%	0.0%
Louisville – Other	$0.0	0.0%	0.0%
Louisville – Retail	$227.0	41.2%	-11.7%
Louisville – Self Storage	$0.0	0.0%	0.0%
Memphis – Memphis, TN-AR-MS MSA	$65.4	2.4%	-1.3%
Memphis – Hotel	$24.3	11.3%	-1.7%
Memphis – Industrial	$0.0	0.0%	0.0%
Memphis – Multifamily	$0.0	0.0%	0.0%
Memphis – Office	$0.0	0.0%	0.0%
Memphis – Other	$0.2	0.5%	0.0%
Memphis – Retail	$40.9	11.4%	-4.9%
Memphis – Self Storage	$0.0	0.0%	0.0%
Miami – Miami-Fort Lauderdale-Pompano Beach, FL MSA	$411.7	1.5%	0.3%
Miami – Hotel	$63.1	1.4%	-0.8%
Miami – Industrial	$0.0	0.0%	0.0%
Miami – Multifamily	$39.1	0.3%	0.3%
Miami – Office	$04.0	0.2%	0.0%
Miami – Other	$08.6	0.5%	-0.1%
Miami – Retail	$296.9	6.3%	2.6%
Miami – Self Storage	$0.0	0.0%	0.0%
Milwaukee – Milwaukee-Waukesha-West Allis, WI MSA	$270.5	10.1%	-0.6%
Milwaukee – Hotel	$25.3	16.0%	3.8%
Milwaukee – Industrial	$0.0	0.0%	0.0%
Milwaukee – Multifamily	$0.0	0.0%	0.0%
Milwaukee – Office	$94.3	17.6%	0.0%
Milwaukee – Other	$0.6	0.4%	0.0%
Milwaukee – Retail	$150.3	30.5%	0.1%
Milwaukee – Self Storage	$0.0	0.0%	0.0%
Minneapolis – Minneapolis-St. Paul-Bloomington, MN-WI MSA	$1,772.7	20.1%	-2.0%
Minneapolis – Hotel	$285.5	42.0%	-2.2%
Minneapolis – Industrial	$0.0	0.0%	0.0%
Minneapolis – Multifamily	$0.0	0.0%	0.0%
Minneapolis – Office	$74.8	3.8%	-3.4%
Minneapolis – Other	$04.2	0.9%	0.0%
Minneapolis – Retail	$1,408.2	74.9%	-0.5%
Minneapolis – Self Storage	$0.0	0.0%	0.0%
Nashville – Nashville-Davidson-Murfreesboro-Franklin, TN MSA	$68.9	1.0%	-0.1%
Nashville – Hotel	$59.3	4.1%	-0.2%
Nashville – Industrial	$0.0	0.0%	0.0%
Nashville – Multifamily	$0.0	0.0%	0.0%
Nashville – Office	$0.0	0.0%	0.0%
Nashville – Other	$0.2	0.5%	0.0%
Nashville – Retail	$09.4	1.3%	0.0%
Nashville – Self Storage	$0.0	0.0%	0.0%
New Orleans – New Orleans-Metairie-Kenner, LA MSA	$134.3	3.4%	-9.6%
New Orleans – Hotel	$83.3	7.3%	-29.7%
New Orleans – Industrial	$0.0	0.0%	0.0%
New Orleans – Multifamily	$11.5	1.0%	0.0%
New Orleans – Office	$17.2	3.0%	0.0%
New Orleans – Other	$0.0	0.0%	0.0%
New Orleans – Retail	$22.3	3.3%	-0.1%
New Orleans – Self Storage	$0.0	0.0%	0.0%
New York City – New York-Northern New Jersey-Long Island, NY-NJ-PA MSA	$5,648.5	4.1%	-0.2%
New York City – Hotel	$1,164.5	30.7%	-3.1%
New York City – Industrial	$58.5	1.4%	1.2%
New York City – Multifamily	$393.3	0.9%	0.1%
New York City – Office	$1,470.0	3.1%	0.1%
New York City – Other	$1,416.2	5.7%	-0.6%
New York City – Retail	$1,145.9	8.9%	0.2%
New York City – Self Storage	$0.0	0.0%	0.0%
Orlando – Orlando-Kissimmee, FL MSA	$197.1	1.6%	0.0%
Orlando – Hotel	$86.0	2.8%	-0.1%
Orlando – Industrial	$0.0	0.0%	0.0%
Orlando – Multifamily	-$0.7	0.0%	0.0%
Orlando – Office	$71.9	15.0%	4.2%
Orlando – Other	$0.0	0.0%	0.0%
Orlando – Retail	$39.9	4.1%	0.1%
Orlando – Self Storage	$0.0	0.0%	0.0%
Philadelphia – Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA	$260.6	1.2%	-0.2%
Philadelphia – Hotel	$87.4	9.2%	-1.3%
Philadelphia – Industrial	$0.0	0.0%	0.0%
Philadelphia – Multifamily	$41.7	0.4%	0.0%
Philadelphia – Office	$91.4	2.3%	-0.6%
Philadelphia – Other	$20.5	1.5%	0.0%
Philadelphia – Retail	$19.7	0.9%	0.0%
Philadelphia – Self Storage	$0.0	0.0%	0.0%
Phoenix – Phoenix-Mesa-Scottsdale, AZ MSA	$219.7	1.0%	-0.2%
Phoenix – Hotel	$32.4	2.0%	-0.1%
Phoenix – Industrial	$0.0	0.0%	-0.8%
Phoenix – Multifamily	$0.0	0.0%	0.0%
Phoenix – Office	$41.1	1.9%	0.1%
Phoenix – Other	$0.0	0.0%	0.0%
Phoenix – Retail	$146.2	7.8%	0.0%
Phoenix – Self Storage	$0.0	0.0%	0.0%
Pittsburgh – Pittsburgh, PA MSA	$51.0	0.9%	-0.1%
Pittsburgh – Hotel	$08.4	5.0%	-4.9%
Pittsburgh – Industrial	$0.0	0.0%	0.0%
Pittsburgh – Multifamily	$0.0	0.0%	0.0%
Pittsburgh – Office	$24.0	2.1%	0.0%
Pittsburgh – Other	$18.6	4.1%	2.2%
Pittsburgh – Retail	$0.0	0.0%	0.0%
Pittsburgh – Self Storage	$0.0	0.0%	0.0%
Portland – Portland-Vancouver-Beaverton, OR-WA MSA	$439.0	5.3%	-1.1%
Portland – Hotel	$415.8	44.3%	-4.2%
Portland – Industrial	$0.0	0.0%	0.0%
Portland – Multifamily	$10.2	0.2%	-0.1%
Portland – Office	$13.0	3.1%	-1.8%
Portland – Other	$0.0	0.0%	0.0%
Portland – Retail	$0.0	0.0%	0.0%
Portland – Self Storage	$0.0	0.0%	0.0%
Raleigh – Raleigh-Cary, NC MSA	$15.3	0.3%	-0.3%
Raleigh – Hotel	$15.3	6.1%	-3.2%
Raleigh – Industrial	$0.0	0.0%	0.0%
Raleigh – Multifamily	$0.0	0.0%	0.0%
Raleigh – Office	$0.0	0.0%	0.0%
Raleigh – Other	$0.0	0.0%	0.0%
Raleigh – Retail	$0.0	0.0%	0.0%
Raleigh – Self Storage	$0.0	0.0%	0.0%
Richmond – Richmond, VA MSA	$54.8	1.4%	-0.2%
Richmond – Hotel	$0.0	0.0%	0.0%
Richmond – Industrial	$0.0	0.0%	0.0%
Richmond – Multifamily	$0.0	0.0%	0.0%
Richmond – Office	$0.0	0.0%	0.0%
Richmond – Other	$0.0	0.0%	0.0%
Richmond – Retail	$54.8	10.8%	-0.4%
Richmond – Self Storage	$0.0	0.0%	0.0%
Riverside – Riverside-San Bernardino-Ontario, CA MSA	$291.2	2.6%	-0.3%
Riverside – Hotel	$62.6	13.9%	-0.9%
Riverside – Industrial	$0.0	0.0%	0.0%
Riverside – Multifamily	$0.0	0.0%	0.0%
Riverside – Office	$0.0	0.0%	0.0%
Riverside – Other	$0.0	0.0%	0.0%
Riverside – Retail	$228.6	11.0%	-0.2%
Riverside – Self Storage	$0.0	0.0%	0.0%
Sacramento – Sacramento-Arden-Arcade-Roseville, CA MSA	$05.7	0.1%	0.0%
Sacramento – Hotel	$05.7	1.4%	-0.3%
Sacramento – Industrial	$0.0	0.0%	0.0%
Sacramento – Multifamily	$0.0	0.0%	0.0%
Sacramento – Office	$0.0	0.0%	0.0%
Sacramento – Other	$0.0	0.0%	0.0%
Sacramento – Retail	$0.0	0.0%	0.0%
Sacramento – Self Storage	$0.0	0.0%	0.0%
Salt Lake City – Salt Lake City, UT MSA	$28.0	0.6%	-0.1%
Salt Lake City – Hotel	$28.0	9.5%	-0.5%
Salt Lake City – Industrial	$0.0	0.0%	0.0%
Salt Lake City – Multifamily	$0.0	0.0%	0.0%
Salt Lake City – Office	$0.0	0.0%	0.0%
Salt Lake City – Other	$0.0	0.0%	0.0%
Salt Lake City – Retail	$0.0	0.0%	0.0%
Salt Lake City – Self Storage	$0.0	0.0%	0.0%
San Antonio – San Antonio, TX MSA	$129.7	1.9%	-0.2%
San Antonio – Hotel	$04.3	1.6%	-1.3%
San Antonio – Industrial	$0.0	0.0%	0.0%
San Antonio – Multifamily	$08.0	0.2%	0.2%
San Antonio – Office	$0.0	0.0%	0.0%
San Antonio – Other	$0.0	0.0%	0.0%
San Antonio – Retail	$117.4	19.4%	0.1%
San Antonio – Self Storage	$0.0	0.0%	0.0%
San Diego – San Diego-Carlsbad-San Marcos, CA MSA	$98.6	0.7%	0.0%
San Diego – Hotel	$61.6	2.9%	-0.2%
San Diego – Industrial	$0.0	0.0%	0.0%
San Diego – Multifamily	$13.7	0.2%	0.0%
San Diego – Office	$0.0	0.0%	0.0%
San Diego – Other	$20.4	2.7%	-0.2%
San Diego – Retail	$02.9	0.2%	0.2%
San Diego – Self Storage	$0.0	0.0%	0.0%
San Francisco – San Francisco-Oakland-Fremont, CA MSA	$204.4	0.8%	0.0%
San Francisco – Hotel	$99.8	4.1%	-1.1%
San Francisco – Industrial	$0.0	0.0%	0.0%
San Francisco – Multifamily	$16.8	0.2%	0.2%
San Francisco – Office	$01.7	0.0%	0.0%
San Francisco – Other	$38.6	1.5%	0.0%
San Francisco – Retail	$47.6	3.8%	-0.1%
San Francisco – Self Storage	$0.0	0.0%	0.0%
San Jose – San Jose-Sunnyvale-Santa Clara, CA MSA	$121.9	0.6%	0.0%
San Jose – Hotel	$121.9	1.9%	0.0%
San Jose – Industrial	$0.0	0.0%	0.0%
San Jose – Multifamily	$0.0	0.0%	0.0%
San Jose – Office	$0.0	0.0%	0.0%
San Jose – Other	$0.0	0.0%	0.0%
San Jose – Retail	$0.0	0.0%	0.0%
San Jose – Self Storage	$0.0	0.0%	0.0%
Seattle – Seattle-Tacoma-Bellevue, WA MSA	$117.1	0.5%	0.0%
Seattle – Hotel	$108.5	7.3%	-0.9%
Seattle – Industrial	$0.0	0.0%	0.0%
Seattle – Multifamily	$08.7	0.1%	0.1%
Seattle – Office	$0.0	0.0%	0.0%
Seattle – Other	$0.0	0.0%	0.0%
Seattle – Retail	$0.0	0.0%	0.0%
Seattle – Self Storage	$0.0	0.0%	0.0%
St. Louis – St. Louis, MO-IL MSA	$248.1	5.0%	-1.3%
St. Louis – Hotel	$23.7	7.8%	-7.4%
St. Louis – Industrial	$0.0	0.0%	0.0%
St. Louis – Multifamily	$07.7	0.4%	0.1%
St. Louis – Office	$0.0	0.0%	0.0%
St. Louis – Other	$23.0	3.2%	-1.2%
St. Louis – Retail	$193.7	20.2%	-1.1%
St. Louis – Self Storage	$0.0	0.0%	0.0%
Tampa – Tampa-St. Petersburg-Clearwater, FL	-$03.8	0.0%	-1.5%
Tampa – Hotel	$29.8	3.8%	-0.6%
Tampa – Industrial	$0.0	0.0%	0.0%
Tampa – Multifamily	-$111.3	-1.3%	-1.3%
Tampa – Office	$23.6	3.6%	0.0%
Tampa – Other	$0.0	0.0%	0.0%
Tampa – Retail	$54.1	7.1%	-16.1%
Tampa – Self Storage	$0.0	0.0%	0.0%
Tucson – Tucson, AZ MSA	$160.5	4.1%	-1.0%
Tucson – Hotel	$0.0	0.0%	-1.4%
Tucson – Industrial	$0.0	0.0%	0.0%
Tucson – Multifamily	$0.0	0.0%	0.0%
Tucson – Office	$0.0	0.0%	0.0%
Tucson – Other	$0.0	0.0%	0.0%
Tucson – Retail	$160.5	19.5%	0.2%
Tucson – Self Storage	$0.0	0.0%	0.0%
Virginia Beach – Virginia Beach-Norfolk-Newport News, VA-NC MSA	$218.2	3.9%	1.1%
Virginia Beach – Hotel	$09.4	2.0%	2.0%
Virginia Beach – Industrial	$21.2	6.9%	0.0%
Virginia Beach – Multifamily	$0.0	0.0%	0.0%
Virginia Beach – Office	$0.0	0.0%	0.0%
Virginia Beach – Other	$0.0	0.0%	0.0%
Virginia Beach – Retail	$187.7	22.2%	9.8%
Virginia Beach – Self Storage	$0.0	0.0%	0.0%
Washington, DC – Washington-Arlington-Alexandria, DC-VA-MD-WV MSA	$490.2	1.4%	-0.3%
Washington, DC – Hotel	$43.6	3.9%	-1.2%
Washington, DC – Industrial	$0.0	0.0%	-1.6%
Washington, DC – Multifamily	$0.0	0.0%	0.0%
Washington, DC – Office	$301.9	4.0%	0.0%
Washington, DC – Other	$44.7	2.7%	-0.1%
Washington, DC – Retail	$100.0	3.0%	-0.2%
Washington, DC – Self Storage	$0.0	0.0%	0.0%
Grand Total	$19,797.4	2.5%	-0.3%

About CRED iQ

Yelp Office Closures

CRED iQ

July 6, 2022

In this week’s WAR Report, CRED iQ calculated updated valuations for two office buildings in Manhattan and Chicago with exposure to Yelp as a tenant. Multiple news outlets, including Globe St., The Real Deal, and Commercial Observer, reported in late-June 2022 that online service review provider Yelp plans to close offices in three gateway cities and downsize its presence in other office locations. Yelp plans to close offices in DC, New York City, and Chicago and will also reduce its footprint at a Scottsdale, AZ office building. In a June 23^rd blog post, the CEO of Yelp stated that the offices would close on July 29^th and the company would focus on a fully remote strategy. The shift to remote work is one of the many headwinds the office sector is facing, in addition to rising availability rates and the prospects of a recession.

One of the properties with a Yelp office slated for closure —11 Madison Avenue in Manhattan, NY — secures $1.075 billion in CMBS debt that is scheduled to mature in September 2025. Additionally, theMART in Chicago, IL formerly secured a $675 million commercial mortgage that was paid off in May 2021. CRED iQ reviewed Yelp’s footprint at both properties and the subsequent impacts of the firm’s departure. Similar to our June 21 Report discussing the impacts of Revlon’s bankruptcy on the commercial mortgage secured by One New York Plaza, the losses of revenue from Yelp on a stand-alone basis are unlikely to put either of these two assets in distress. However, CRED iQ’s base-case valuations considered lower projected cash flows from the loss of Yelp as well as the need to backfill the available space.

CRED iQ valuations factor in base-case (most likely), downside (significant loss of tenants), and dark scenarios (100% vacant). Base-case valuations are presented below. For full access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and borrower contact information, sign up for a free trial here.

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11 Madison

2.3 million sf, CBD Office, Manhattan, NY [View Details]

Yelp is the third-largest tenant at 11 Madison Avenue pursuant to a lease that expires in April 2025. Since loan origination in 2015, Yelp has occupied floors 14 and 16 (152,232 sf) of the 29-story building and pays base rent of approximately $14.5 million per year for the space, equal to $95/sf. Yelp’s base rent is approximately 14% higher than the average asking rent for the Midtown South submarket as of June 2022, according to CBRE. The firm expanded its space into the 17th floor in 2017 for a total footprint of 191,797 sf, equal to 8.4% of the property’s NRA. In addition to base rent, Yelp also pays reimbursements for operating expenses and real estate taxes.

Eleven Madison was nearly 100% occupied as of March 2022. The property is anchored by Credit Suisse with a lease accounting for 55% of NRA in place through May 2037. Additionally, Sony leases approximately 25% of the building through January 2031. Although, occupancy could potentially decline to approximately 92% with the departure of Yelp, 11 Madison offers some of the largest floor plates in Manhattan and has several advantages over lower quality offices in attracting replacement tenants. Those advantages are necessary in a Midtown South office market with an 18.7% availability rate. Subsequently, occupancy or lease rollover risk do not appear to be near-term credit risk concerns for the property or loan. For the full valuation report and loan-level details, click here.

Property Name	11 Madison
Address	^{11 Madison Avenue New York, NY 10010}
MSA	^{New York-Northern New Jersey-Long Island, NY-NJ-PA}
Market	Midtown South
Submarket	Madison/Union Square
Property Type	Office
Size	2,285,043 sf
Loan Balance	$1,075,000,000
Interest Rate	3.56%
Maturity Date	9/6/2025
Most Recent Appraisal	$2,350,000,000 ($1,028/sf)
Most Recent Appraisal Date	7/1/2015

CRED iQ Base-Case Value	$2,509,000,000 ($1,098/sf)
CRED iQ Base-Case LTV	43%

theMART

3.6 million sf, CBD office, Chicago, IL [View Details]

Yelp is the fourth-largest tenant at theMART (formerly known as Chicago Merchandise Mart) pursuant to a lease that expires in July 2023. Yelp occupied 132,044 sf on the fifth floor, which was equal to approximately 3.6% of the property’s NRA. The firm paid base rent of approximately $37.29/sf.

Unlike the stable rent roll of 11 Madison, the tenant roster of theMART has some uncertainty. Occupancy at the property was approximately 89% as of January 2022 but has steadily declined since 2017 after multiple tenants vacated and moved to office space in Fulton Market, a highly favored submarket in the Chicago CBD.

The property’s largest tenant, Motorola Mobility, leases 609,071 sf (17% of the property’s NRA) pursuant to a lease that expires in August 2028. However, Motorola Mobility had a lease termination option that would have been effective September 1, 2023, but notice was due by March 1, 2022. In past years, Motorola Mobility has been actively subleasing portions of its space. It was unconfirmed if the termination option was executed. The building’s second-largest tenant, MTM-MM LLC (6% of NRA), is an affiliate of Vornado Realty Trust, which owns the property.

Altogether, office space only accounts for 55% of the property’s NRA. The property is widely recognized for its showroom and tradeshow space, which accounts for approximately 42% of the property’s NRA. However, showroom space has traditionally struggled in recessionary environments. Operational performance of theMART is worth monitoring given the above developments and observations. For the full valuation report and loan-level details, click here.

Property Name	theMART
Address	^{222 W Merchandise Mart Plaza Chicago, IL 60654}
MSA	^{Chicago-Naperville-Joliet, IL-IN-WI}
Market	Chicago CBD
Submarket	River North
Property Type	Mixed Use (Office/Showroom)
Size	3,648,777 sf
Most Recent Appraisal	$1,640,000,000 ($449/sf)
Most Recent Appraisal Date	8/30/2016

CRED iQ Base-Case Value	$1,012,000,000 ($277/sf)

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About CRED iQ

July 2022 Delinquency Report

CRED iQ

June 30, 2022

The CRED iQ delinquency rate for CMBS declined modestly during the June 2022 remittance period. Overall delinquency has declined consecutively in each month since June 2020. This month, the delinquency rate, equal to the percentage of all delinquent specially serviced loans and delinquent non-specially serviced loans, for CRED iQ’s sample universe of $500+ billion in CMBS conduit and single asset single-borrower (SASB) loans was 3.30%, which compares to last month’s rate of 3.32%. CRED iQ’s special servicing rate, equal to the percentage of CMBS loans that are with the special servicer (delinquent and non-delinquent), declined month-over month to 4.64% from 5.17%. The CMBS special servicing rate has declined for seven consecutive months. Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 4.95% of CMBS loans that are specially serviced, delinquent, or a combination of both. The overall distressed rate declined compared to the prior month rate of 5.33%. These distressed rates typically track slightly higher than special servicing rates as most delinquent loans are also with the special servicer.

By property type, the delinquency rate increased in June for the office and industrial sectors. The delinquency rate for loans secured by office properties was 1.72% as of June 2022, which was an increase compared to 1.60% in the previous month. However, office delinquency is still down by approximately 47 bps from a year ago. A major contributor to the increase in office delinquency was the $231 million 260 and 261 Madison loan, which failed to pay off at maturity on June 11, 2022. According to a March 2022 Commercial Observer article, The Sapir Organization as loan sponsor was marketing the 923,277-sf office property for sale, although updated servicer commentary indicates a refinance is also being considered.

Delinquency rates declined in June 2022 for the retail, lodging and self-storage sectors. Retail continued to have the highest delinquency rate (6.01%) by property type for the third consecutive month after eclipsing the lodging sector in April 2022. Similar to the prior month, there were new high-profile retail delinquencies this month, including an $85.2 million loan secured by the Crossroads Center regional mall in Saint Cloud, MN. The loan became 30 days delinquent in June 2022 but has been in special servicing since October 2020.

Special servicing rates declined across all major property types this month. The lodging sector, which had a special servicing rate of 7.72%, exhibited the greatest month-over-month improvement among all property types. One of the more notable drivers behind the decline in the special servicing rate for lodging loans was the $325 million Hyatt Regency New Orleans. The loan transferred to special servicing in July 2020 due to pandemic-related disruptions to operations but returned to the master servicer on May 17, 2022 after a March 2022 loan modification.

The retail sector had the highest special servicing rate (9.43%), weighted by relatively large mortgages secured by regional malls. In one of this month’s latest developments, the $210 million Eastview Mall and Commons loan transferred to special servicing on June 1, 2022. The borrower cited ongoing issues related to the pandemic; however, the loan also has an impending September 2022 maturity date in an unfavorable refinancing environment.

CRED iQ’s CMBS distressed rate (DQ + SS%) by property type accounts for loans that qualify for either delinquent or special servicing subsets. This month, overall distressed rates for all property types declined, except for office and industrial. Two of the largest loans added to the distressed category this month were 260 and 261 Madison Avenue, which failed to pay off at maturity, and Eastview Mall and Commons, which transferred to special servicing. For additional information about these two loans, click View Details below:

	[View Details]	[View Details]
Loan	260 and 261 Madison Avenue	Eastview Mall and Commons
Balance	$231,000,000	$210,000,000
Special Servicer Transfer Date	–	6/1/2022

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