Specially Serviced Loans

March 29, 2022

In this week’s WAR Report, CRED iQ calculated real-time valuations for five distressed properties that have transferred to special servicing in March 2022. Among these is a Chicago-area regional mall that is controlled by Starwood Capital Group. Additionally, there are two office properties featured, including a suburban office campus in the Milwaukee, WI MSA and a CBD office tower in Baltimore, MD. The final two highlighted properties comprise a student housing building in western Pennsylvania and a mixed-use property in San Francisco, CA.

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

Chicago Ridge Mall

568,915 sf, Regional Mall, Chicago Ridge, IL [View Details]

Yet another regional mall controlled by Starwood Capital Group will need a special servicing workout. The Chicago Ridge Mall, which secures an $80 million mortgage, transferred to Trimont Real Estate Advisors, as special servicer, on March 14, 2022. A reason for the transfer was not initially cited, but the mall’s cash flows were severely impacted by the pandemic and performance has not recovered to pre-pandemic levels. The loan sponsor is a joint venture that is controlled by Starwood Property Group — CRED iQ recently featured a portfolio of Starwood malls in its March 8, 2022 WAR Report. The loan was scheduled to mature in July 2022, but a payoff is unlikely given the value impairment of the collateral. CRED iQ is also watching for a potential title transfer from the borrowing entity to the CMBS trust.

Chicago Ridge Mall is located about 16 miles outside of Chicago, IL and has a total size of 867,955 sf, but only 568,915 sf serve as collateral for the mortgage. There is a vacant 211,858-sf parcel that was formerly occupied by Sears until it closed in 2021. The vacant anchor box is owned by Transformco and there are no immediate plans for redevelopment. Kohl’s also operates as an anchor at the mall and owns its building. Kohl’s, which has been the subject of takeover speculation over the past month, was featured in last week’s WAR Report, which explored CMBS exposure to Kohl’s store locations.

The largest collateral tenants at Chicago Ridge Mall include Dick’s Sporting Goods (9% of NRA), Bed Bath & Beyond (7% of NRA), and AMC Theatres (6% of NRA). Dick’s Sporting Goods opened in 2021 and partially backfilled space that was left vacant by Carson Pirie Scott, a former department store anchor. Aldi provides a grocery component at the mall with a 20,042-sf space, but the tenant has a right to terminate its lease at any time given a 24-month notice. The mall was 80% occupied as of September 2021, which was an improvement compared to 70% occupancy during the prior year. Net cash flow for 2021 was on pace to be over 30% below pre-pandemic levels from year-end 2019. For the full valuation report and property-level details, click here.

Property Name	Chicago Ridge Mall
Address	^{444 Chicago Ridge Mall Chicago Ridge, IL 60415}
Outstanding Balance	$80,000,000
Interest Rate	4.60%
Maturity Date	7/6/2022
Most Recent Appraisal	$129,700,000 ($228/sf)
Most Recent Appraisal Date	4/17/2012

The Pinnacle at Bishop’s Woods

248,175 sf, Suburban Office, Brookfield, WI [View Details]

This $29.1 million loan transferred to special servicing on March 1, 2022 due to low occupancy at the collateral property, a three-building suburban office park. The loan’s DSCR has declined for three consecutive years and was most recently reported as 1.09 for the nine-month period ending September 2021. Occupancy across the three collateral office buildings was 67% as of September 2021. The next steps of workout are likely to address the low occupancy across the office portfolio and to mitigate a high concentration of lease rollover in 2022 at the smallest of the three buildings, Pinnacle I.

The Pinnacle at Bishop’s Woods consists of three office properties in Brookfield, WI, approximately 10 miles west of Milwaukee: Pinnacle I (13890 Bishop’s Drive), Pinnacle II (13935 Bishop’s Drive), and Pinnacle III (13845 Bishop’s Drive). The office park first exhibited occupancy declines in 2016 when the former largest tenant, Bader Rutter & Associates (27% of the NRA), vacated Pinnacle III in favor of a CBD location in Milwaukee. A portion of the space was backfilled by a new tenant, Pentair Residential Filtration, and an existing tenant, DeWitt Ross & Stevens SC, expanded its space to offset some of the loss from Bader Rutter. More recently, the office park’s second largest tenant, Travelers Indemnity (formerly 21% of the NRA; now 11%), reduced its footprint at Pinnacle II after signing a five-year renewal in August 2021. Overall, occupancy has declined by nearly 30% since loan origination. For the full valuation report and property-level details, click here.

The Pinnacle at Bishop’s Woods – CGCMT 2014-GC25

Property Name	The Pinnacle at Bishop’s Woods
Address	^{13845-13935-13890 Bishop’s Drive Brookfield, WI 53005}
Outstanding Balance	$29,136,932
Interest Rate	4.67%
Maturity Date	7/1/2024
Most Recent Appraisal	$45,250,000 ($182/sf)
Most Recent Appraisal Date	6/3/2014
CRED iQ Base-Case Value	$30,903,000 ($124/sf)
Pinnacle II	$14,090,000 ($138/sf)
Pinnacle III	$9,955,000 ($124/sf)
Pinnacle I	$6,858,000 ($105/sf)

300 East Lombard

225,485 sf, CBD Office, Baltimore, MD [View Details]

This $24.8 million loan transferred to special servicing on March 14, 2022, likely due to an impending decline in collateral occupancy. The loan is secured by a 19-story office tower located in the Inner Harbor submarket of Baltimore, MD. The Baltimore Business Journal first reported that the building’s largest tenant, law firm Ballard Spahr, planned to vacate 300 East Lombard in favor of a smaller space at 111 S. Calvert Street, a newly renovated building with more tenant amenities that is located a block closer to the harbor. CRED iQ has featured multiple Baltimore CBD office buildings in WAR Reports so far in 2022, including 650 South Exeter Street and 201 North Charles. In each of these cases of distress, tenants have either vacated, downsized, or fled to higher quality locations — exhibiting how dynamic office markets can be in an environment with remote-work and pandemic considerations.

Ballard Spahr’s lease at 300 East Lombard is scheduled to expire on April 30, 2022. The tenant accounted for 15% of the property’s NRA. CRED iQ estimates occupancy will decline to approximately 65% following the tenant’s departure. For the full valuation report and property-level details, click here.

Property Name	300 East Lombard
Address	^{300 East Lombard Street Baltimore, MD 21202}
Outstanding Balance	$24,889,795
Interest Rate	4.05%
Maturity Date	2/11/2025
Most Recent Appraisal	$38,500,000 ($171/sf)
Most Recent Appraisal Date	12/17/2014

Philadelphia Square

259 units, Student Housing, Indiana, PA [View Details]

This $10.5 million loan transferred to special servicing on March 11, 2022, which is two months ahead of the May 11, 2022 scheduled maturity date. The loan had a below breakeven DSCR during 2020 and through the nine-month period ended September 2021. The loan is secured by a 259-unit student housing property that caters to students enrolled at Indiana University of Pennsylvania (IUP). Enrollment at IUP has been falling for several years. Fall 2021 enrollment was 9,308 students, which represented a 7.5% decline compared to the prior year. Lower enrollment is a catalyst for lower demand and weakness in rental rates at off-campus student housing facilities. CRED iQ’s highest scoring comp for the property is IUP Pratt Studios, which transferred to special servicing in July 2021 and became REO in October 2021. For the full valuation report and property-level details for Philadelphia Square, click here.

Property Name	Philadelphia Square
Address	^{1055 Philadelphia Street Indiana, PA 15701}
Outstanding Balance	$10,521,706
Interest Rate	5.35%
Maturity Date	5/11/2022
Most Recent Appraisal	$16,750,000 ($64,672/unit)
Most Recent Appraisal Date	1/31/2012

1010 Bush

20,586 sf, Mixed-Use (Retail/Multifamily), San Francisco, CA [View Details]

This $8 million loan transferred to special servicing on March 2, 2022 due to imminent monetary default. The loan is secured by a mixed-use property located in the Nob Hill submarket of San Francisco. The three-story building consists of ground floor retail and 65 residential hotel rooms that are operated as single-room occupancy units. The single-room occupancy units are master leased by Balmoral Residences, LLC for approximately $850 per unit per month. The master lease is scheduled to expire in February 2026. Multifamily and lodging property types have faced headwinds in the San Francisco MSA since the onset of the pandemic. Early in the pandemic, there was evidence of higher multifamily vacancies. Additionally, the lodging sector has been slow to recover. With a master lease in place, it is difficult to discern the performance of Balmoral Residences; however, the residential hotel company likely faces similar struggles to other distressed multifamily and lodging properties in San Francisco. For the full valuation report and property-level details, click here.

Property Name	1010 Bush
Address	^{1010 Bush Street San Francisco, CA 94109}
Outstanding Balance	$8,000,000
Interest Rate	5.45%
Maturity Date	11/6/2028
Most Recent Appraisal	$12,500,000 ($607/sf)
Most Recent Appraisal Date	7/26/2018

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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, Ginnie Mae, FHA/HUD, and Freddie Mac loan and property data.

CMBS and Commercial Real Estate Implications of a Kohl’s Takeover

CRED iQ

March 21, 2022

Key Takeaways:

Kohl’s plans to open smaller stores and transition away from department store format
The highest concentration of Kohl’s lease expirations occurs in 2024 impacting $815 million in CMBS debt
CMBS exposure to Kohl’s totals approximately $5 billion

Speculation surrounding Kohl’s and its future as a public company has been active during Q1 2022. In early-March 2022, Kohl’s provided updates on strategic initiatives for the company, which included a transition away from traditional department store operations. The retailer plans to open 100 new stores over the next four years with a smaller format than the 80,000 to 100,000-sf footprint of a Kohl’s legacy store layout. Kohl’s has reportedly faced pressure from activist investors to sell the company. Interested parties included hedge fund Starboard Value and private equity firm Sycamore Partners. Most recently, Hudson’s Bay — the former owner of failed department store Lord & Taylor — was reported to be considering a takeover bid for Kohl’s. The strategic objectives of Kohl’s management and external pressures from activist investors may lead to subsequent impacts in the commercial real estate sector.

In a takeover, many of Kohl’s owned real estate locations may be sold in a sale-leaseback transaction. Store closures or reduced footprints, in line with current management objectives, may also be possibilities for future operations. In all scenarios, retail landlords will need to adapt to the evolution of the retailer’s operational and real estate strategies.

Kohl’s operated approximately 1,165 stores as of January 2022 and owned 35% of the real estate for those locations. Kohl’s leased space for approximately 44% of its store locations. For 20% of the store locations, Kohl’s owned its building improvements and ground-leased the underlying land. Leased locations typically operate pursuant to a 20 to 25-year lease agreement with several five-year extension options.

Kohl’s has been historically more versatile than counterparts JCPenney and Macy’s with the location of its stores less reliant on regional malls. Only 5% of all stores are part of a community center or regional mall. Most locations, approximately 81%, anchor smaller strip centers. Kohl’s also operates freestanding locations, which make up 13% of the total store count.

CRED iQ leveraged its platform to identify properties leased to Kohl’s and properties that are shadow-anchored by a Kohl’s store. CRED iQ identified 230 properties with exposure to Kohl’s with actionable data including lease size, lease expiration date, property information, and borrower contact information. Most leases for this group of properties have expirations within the next 10 years. There were nine leases identified with expirations in 2022, including three active CMBS loans with $167.3 million in outstanding debt. The highest concentration of lease rollover is in 2024 with 23 leases scheduled to expire. Twenty-one of these properties secure active CMBS debt totaling $815 million. Classifying properties by lease expiration date, CRED iQ was further able to isolate properties with a Kohl’s lease expiration as shown Figure 1.

CRED iQ identified active CMBS exposure to Kohl’s as a tenant, which totaled approximately $5 billion in outstanding mortgage debt secured by 172 properties with Kohl’s as a leased tenant or shadow anchor. There were 13 properties with Kohl’s exposure, totaling $539.9 million, that were in special servicing and in need of workout. Eight of those properties were REO and had outstanding debt of $310.5 million. University Mall in Burlington, VT is the largest REO property by outstanding debt amount with $92 million in unpaid principal balance. Kohl’s leases 86,605 sf, equal to 14% of the property’s NRA, pursuant to lease that expires in February 2024. As of February 2022, University Mall was under contract to be sold.

The implications of near-term lease expirations coupled with initiatives by Kohl’s to reduce store layout sizes could have negative impacts on CMBS collateral if the tenant opts to downsize or move to a more favorable and strategic location.

Furthermore, sale-leaseback transactions have the possibility of converting complimentary retail space into competitive space for smaller shadow-anchored retail centers. Monitoring the various scenarios may be a complicated endeavor, but still not as complicated as figuring out how to use Kohl’s Cash (it’s probably expired).

For a copy of a comprehensive list of properties with exposure to Kohl’s — including CMBS exposure, please reach out to Shane Beeson (shane@cred-iq.com) or click the link below.

Explore Kohl’s CMBS Exposure

The list includes:

a comprehensive list of 230 property records with Kohl’s exposure, including lease size and lease expiration date
all CMBS exposure to Kohl’s, including shadow anchored properties and
a complete list of all Kohl’s locations in the US (1,164 locations)

This week’s WAR Report focuses specifically on a few notable properties with Kohl’s exposure, including distressed regional malls. The third property is a freestanding single-tenant property in Tallahassee, FL that is leased to Kohl’s but went dark when the tenant vacated. CRED iQ provided updated real-time valuations for each of the properties.

CRED iQ valuations factor in a base-case (most likely), a downside (significant loss of tenants or 50% reduction in rent), and dark scenarios (100% vacant). For full access to the valuation reports as well as full CMBS loan reporting, with detailed financials, updated tenant information, and borrower contact information, sign up for a free trial here.

Kitsap Mall

715,255 sf, Regional Mall, Silverdale, WA [View Details]

Kohl’s operates a 76,145-sf store at Kitsap Mall, a REO regional mall in Silverdale, WA with $74 million in outstanding debt. Kohl’s owns its improvements, located on the north side of the mall adjacent to JCPenney. The entire mall, including Kohl’s, measures approximately 715,255 sf in size. Only about 533,480 sf of the space is the portion that was foreclosed on in December 2021. The REO portion of the mall was formerly owned by Starwood Retail Partners. CRED iQ previously featured Starwood-affiliated malls in its March 8, 2022 WAR Report, which also mentioned Kitsap Mall as a comp for the Capital Mall located in Olympia, WA.

CW Capital is the appointed special servicer for the Kitsap Mall and has indicated plans to stabilize in-line occupancy and improve operations. The mall will need to be sold out of the CMBS trust at some point in the future. Kohl’s could potentially exit this location through a sale-leaseback; although the central location to Silverdale’s retail corridor may be the best option for the retailer if it wants to remain in the market. The nearest Kohl’s is located approximately 30 miles south in Gig Harbor, WA. For the full valuation report and property-level details, click here.

Property Name	Kitsa p Mall
Address	^{10315 Silverdale Way Silverdale, WA 98383}
Outstanding Balance	$74,008,758
Collateral Size	533,480 sf
Kohl’s Size	76,145 sf
Kohl’s Lease Expiration	Owned – Non-Collateral
Most Recent Appraisal	$32,000,000 ($60/sf)
Most Recent Appraisal Date	10/5/2021

Indiana Mall

457,199 sf, Regional Mall, Indiana, PA [View Details]

Kohl’s leases 40,516 sf at Indiana Mall, located approximately 50 miles east of Pittsburgh, PA. Similar to Kitsap Mall, the Indiana Mall is REO. LNR Securities foreclosed on the property in May 2021 and subsequently sold the asset via auction in March 2022. If the auction’s final bid is accepted, a sale of the property could close within 60 days.

Kohl’s operates pursuant to a lease that expires in January 2031. The retailer’s store layout at Indiana Mall is the smallest in CRED iQ’s database and likely aligns with the company’s initiatives for smaller store formats. However, the mall was only 49% occupied as of January 2022. Sales performance for Kohl’s is unavailable for this location, but there appears to be little benefit to the store’s attachment to a struggling mall in need of major redevelopment. For the full valuation report and property-level details, click here.

Property Name	Indiana Mall
Address	^{2334 Oakland Avenue Indiana, PA 15701}
Outstanding Balance	$12,176,005
Collateral Size	457,199 sf
Kohl’s Size	40,516 sf
Kohl’s Lease Expiration	1/31/2031
Most Recent Appraisal	$4,300,000 ($9/sf)
Most Recent Appraisal Date	10/6/2021

Kohl’s – Tallahassee, FL

100,000 sf, Freestanding Retail, Tallahassee, FL [View Details]

Kohl’s leases 100,000 sf in this freestanding retail building at 6785 Thomasville Road in Tallahassee, FL. Kohl’s vacated the property in 2016, but has been honoring the lease, which expires in January 2029. Kohl’s appears to be paying approximately $6.10 per sf in rent under a NNN lease. Servicer commentary for the loan indicates that Kohl’s is in the process of sub-leasing the space and has engaged Colliers to facilitate a deal. The listing can be found here. Kohl’s operates a more favorable location in Tallahassee at 2010 Apalachee Parkway, nearby the Governor’s Square Mall. Despite Kohl’s commitment to its lease obligation at the Thomasville Road location, the mortgage secured by the property has a maturity date in June 2025. The presence of a dark building could cause complications in refinancing the debt. For the full valuation report and property-level details, click here.

Property Name	Kohl’s Tallahassee FL
Address	^{6785 Thomasville Road Tallahassee, FL 32312}
Outstanding Balance	$3,280,489
Collateral Size	100,000 sf
Kohl’s Size	100,000 sf (Dark)
Kohl’s Lease Expiration	1/31/2029
Most Recent Appraisal	$5,900,000 ($59/sf)
Most Recent Appraisal Date	2/7/2015

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Commercial Real Estate Auctions – March 2022

CRED iQ

March 15, 2022

For this edition of the WAR Report, CRED iQ reviewed real-time valuations for five assets that are being marketed for sale this week. Each of these assets is distressed and requires workout by special servicers that have opted for auction sales. While one property is already REO, several properties may be subject to foreclosure if sales do not materialize. This week’s featured properties include three hotels with a history of pre-pandemic distress and two retail properties. All of the assets, four properties and one note, are being sold through an online auction platform with final bids due this week. Valuation guidance for each of the assets is provided prior to the closing of any sales. Contact our team — team@cred-iq.com — for post-auction results and valuation guidance.

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

Western Lights Shopping Center

243,311 sf, Retail Community Center, Syracuse, NY [View Details]

This retail center, which secures a $14 million mortgage, has been in special servicing since October 2020. The property has a history of distress and was also in special servicing from December 2018 through June 2020. KeyBank, as special servicer, does not appear to have attempted to take title of the asset yet but the property has been marketed for sale. An auction sale of the property is scheduled for this week.

Western Lights Shopping Center is located about three miles outside the CBD of Syracuse, NY and has a traditional community center layout. The property is grocery-anchored by Price Chopper, accounting for 28% of the property’s NRA, pursuant to a lease that expires in July 2025. Price Chopper competes with a Wegman’s grocery store located across the street. The property is 71% occupied and has not shown any improvement in attracting new tenants since 2018. For the full valuation report and property-level details, click here.

DBUBS 2011-LC3 - Western Lights Shopping Center

Property Name	Western Lights Shopping Center
Address	^{4729 Onondaga Boulevard Syracuse, NY 13219}
Property Size	243,311 sf
Outstanding Balance	$13,982,093
Most Recent Appraisal	$18,450,000 ($76/sf)
Most Recent Appraisal Date	1/3/2019

Hampton Inn Pittsburgh GreenTree

132 keys, Limited-Service Hotel, Pittsburgh, PA [View Details]

This limited-service hotel, which secures an $8.9 million loan, has been in special servicing since February 2021. Prior to the loan’s transfer to special servicing, a forbearance agreement was signed in August 2020 to provide COVID-related relief. However, cash flow issues existed at the property in 2019, which was evidenced by a below breakeven DSCR for the mortgage. During the forbearance agreement’s repayment period, the loan transferred to special servicing and had delinquent debt service payments. The borrower and special servicer agreed to market the property for sale in order to pay off the loan. The property will be auctioned online this week.

The hotel is located in the Green Tree suburb of Pittsburgh, PA and operates under the Hampton Inn flag pursuant to a franchise agreement that expires on November 30, 2023. Prospective buyers will likely consider costs of a property improvement plan (PIP) required by change of ownership as well as the potential renewal of the franchise agreement. The near-term expiration could also present the opportunity to reposition the hotel under a different brand. The hotel’s closest competitor is a 460-key DoubleTree by Hilton, which benefits from an adjacent sports complex as a primary demand generator. The property averaged 46% occupancy for most of 2021. For the full valuation report and property-level details, click her e.

COMM 2014-CR14 - Hampton Inn Pittsburgh GreenTree

Property Name	Hampton Inn Pittsburgh GreenTree
Address	^{555 Trumbull Drive Pittsburgh, PA 15205}
Property Size	132 keys
Outstanding Balance	$8,925,012
Most Recent Appraisal	$15,000,000 ($113,636/key)
Most Recent Appraisal Date	10/1/2013

Holiday Inn Express & Suites Houston North

109 keys, Limited-Service Hotel, Houston, TX [View Details]

This non-performing loan has an outstanding balance of $6.3 million and is secured by a 109-key limited-service hotel that has been in special servicing since July 2020. Although the loan’s transfer to the special servicer was characterized as COVID-related, the property struggled with cash flow in 2018 and 2019, which yielded below-breakeven DSCRs for the loan. LNR Securities, as special servicer, filed for foreclosure but will attempt to sell the loan prior to scheduling a foreclosure sale. The note sale will be conducted through an online auction this week.

The hotel is located approximately 20 miles north of the Houston, TX CBD and operates as a Holiday Inn Express & Suites pursuant to a franchise agreement with IHG Hotels that expires in October 2024. The property is located fairly close to George Bush Intercontinental Airport (IAH) and has had corporate contracts with airlines in the past, including Spirit Airlines. The hotel faces intense competition given its location along Interstate 45 with more than 10 lodging options within two miles. Additionally, there are three other Holiday Inn Express & Suites locations within 10 miles of the collateral property. For the full valuation report and property-level details, click here.

GSMS 2014-GC26 - Holiday Inn Express & Suites Houston North

Property Name	Holiday Inn Express & Suites Houston North
Address	^{125 Airtex Drive Houston, TX 77090}
Property Size	109 keys
Outstanding Balance	$6,632,621
Most Recent Appraisal	$4,100,000 ($37,615/key)
Most Recent Appraisal Date	7/27/2021

Courtyard Burlington

90 keys, Hotel, Williston, VT [View Details]

This hotel, which has outstanding debt of $6.3 million, has been in special servicing since September 2020. The title transferred to Argentic Services Company LP, acting as special servicer, in December 2021. The property was put up for sale via online auction this week. A change of ownership will likely require a PIP to be implemented by any prospective new owner. The last reported PIP for the property cost approximately $928,000.

The property is located approximately seven miles outside of downtown Burlington, VT and operates as a Courtyard by Marriott pursuant to a franchise agreement that expires March 24, 2032. The hotel’s cash flows were severely disrupted by the pandemic; however, operational struggles can be traced back to 2019. Food and beverage operations in 2019 generated a net loss and impaired total net cash flow for the hotel. More efficient operations under new management are a potential value-add opportunity for prospective investors. For the full valuation report and property-level details, click here.

Property Name	Courtyard Burlington
Address	^{177 Hurricane Lane Williston, VT 05495}
Property Size	90 keys
Outstanding Balance	$6,345,188
Most Recent Appraisal	$8,900,00 ($98,889/key)
Most Recent Appraisal Date	10/1/2021

Sandhill Square

49,400 sf, Retail, Las Vegas NV [View Details]

This retail strip center, which has outstanding debt of $4.5 million, has been in special servicing for nearly nine years. The property has been REO since August 2018. However, there is a possibility that the retail center could be sold this week through an on l ine auction. The property has a long history of high vacancy and low net cash flow compared to comparable retail centers. Furthermore, servicer commentary for the property makes note of groundwater contamination issues that still need to be resolved.

The property is located about five miles east of the Las Vegas Strip and has a traditional strip center layout across two buildings. Many of leasable spaces are uniformly sized and the largest occupied suite is approximately 3,850 sf. The property was 72% occupied as of January 2022. For the full valuation report and property-level details, click here.

Property Name	Sandhill Square
Address	^{4130-4180 S. Sandhill Road Las Vegas, NV 89121}
Property Size	49,400 sf
Outstanding Balance	$4,499,474
Most Recent Appraisal	$4,200,000 ($85/sf)
Most Recent Appraisal Date	1/21/2021

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CMBS – February 2022 Loan Dispositions and Payoffs

CRED iQ

March 10, 2022

In February 2022, CMBS conduit transactions incurred approximately $150 million in realized losses through the workout of distressed assets. CRED iQ identified 18 workouts that the servicer classified as dispositions, liquidations, or discounted payoffs. Of those 18 assets, there were five dispositions that had either a nominal loss or no loss at all. The remaining workouts resulted in loss severities ranging from 2.5% to 88.3%, based on outstanding balances by disposition. Total realized losses in February were an increase compared to January’s realized loss totals of approximately $108.5 million.

The largest loss, by total amount and by loss severity, was the liquidation of Three Westlake Park, which was an REO, 19-story office building located in the Energy Corridor of Houston, TX. The property was vacant at the time of sale and future plans for the property centered around a conversion to multifamily use. The REO liquidation resulted in a $67.4 million loss on an outstanding balance of $76.3 million, equal to an 88.3% loss severity. The loss was allocated to the GSMS 2014-GC20 CMBS conduit transaction, which has been under a Control Termination Event since May 2021 that allows the trust’s operating advisor to consult on a non-binding basis with special servicing major decisions.

More than half of the dispositions in February comprised lodging collateral. Loss severities for the lodging assets were comparatively lower than the period’s retail and office dispositions. Lodging loss severities from the period’s distressed workouts ranged from 0% to 32.5%. The largest lodging disposition was the note sale of a mortgage secured by Marriott – Pittsburgh. The $40.2 million loan was sold with an $8.2 million loss, equal to a 20.4% severity.

Notable among the retail liquidations were two regional malls — Gallery at South Dekalb and Anderson Mall. Both assets had loss severities in excess of 60%, exhibiting the extreme binary nature of distressed workouts for impaired lower-tier regional malls. Prior to their respective liquidations, both malls were foreclosed and became REO in 2021.

The largest individual loss from last month was $62.7 million, equal to a 73.6% loss severity, and stemmed from The Crossroads, which is also a regional mall.

Excluding defeased loans, there was approximately $5.2 billion in securitized debt that was paid off or worked out in February which compares to $3.9 billion in January. In February, 6% of the loan resolutions were categorized as dispositions, liquidations, or discounted payoffs. An additional 6% of the loans paid off with prepayment penalties.

By property type, industrial dominated the volume of outstanding debt paid off in February with Blackstone’s retirement of a $2.8 billion mortgage. This loan was secured by 272 industrial properties formerly owned by Colony Capital.

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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.

Starwood Mall Portfolio

CRED iQ

March 8, 2022

This week, CRED iQ calculated real-time valuations for 5 regional malls that secure $519 million in outstanding mortgage debt. The portfolio has been featured in news headlines extensively over the past few years due to its credit-related struggles and, most recently, was mentioned in a Wall Street Journal article last week after the Israel Securities Authority announced it would back a class-action lawsuit alleging mispresented risks related to unsecured debt that traded on the Tel Aviv Stock Exchange.

For background, the floating-rate mortgage had an original balance of $549 million and was originated in 2018 with a 3-year term and 2, 12-month extension options. The mortgage secures the GSMS 2018-SRP5 single-asset CMBS transaction. The loan is secured by 5 regional malls located in California, Ohio, and Washington. In addition to the mortgage, the Starwood-controlled borrowing entity, which also had equity in two other regional malls outside of this portfolio, incurred additional unsecured debt in the form of ₪910 million issued in Israel, which was equal to approximately $255 million at the time of the securitization of the mortgage. Bond offerings associated with the unsecured debt are the subject of the class-action lawsuit previously mentioned. The mortgage loan has been in special servicing since June 2020, but updated commentary from the servicer indicates the loan may soon return to the master servicer as a corrected mortgage. Following credit issues with the unsecured debt, the Starwood-controlled borrowing entity was taken over by a trustee and Pacific Retail Partners was installed as property manager. The mortgage was modified in June 2021, which in part, extended the loan’s maturity date to December 2025. With consideration for the debt stack and governance issues associated with the mortgage loan, this week’s WAR Report takes a closer look at the underlying value of the collateral malls.

Starwood Mall Portfolio – GSMS 2018-SRP5

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

Plaza West Covina

1.2 million sf, Regional Mall, West Covina, CA [View Details]

Plaza West Covina is a regional mall located about 20 miles east of downtown Los Angeles. The mall is the most valuable within the five-property portfolio and is well positioned in terms of its urban infill location and surrounding demographics. Only a 667,814-sf portion of the mall is collateral for the $519 million mortgage, of which $144.1 million of the debt is allocated to Plaza West Covina. The mall was appraised just prior to loan origination in 2018 for $343 million, equal to $514/sf, but an updated appraisal of $215 million, equal to $322/sf, was reported as of November 2021. The updated appraisal for Plaza West Covina reflected a 37% decline in value since loan origination.

Aside from the secular changes in retail that have plagued regional malls, specific events that impacted Plaza West Covina include the closure of Sears and the departure of 2 of the mall’s 10 largest tenants by percentage of base rent — La Amapola, a restaurant, and The Disney Store. The vacated spaces do not appear to have been backfilled yet; however, the vacant Sears box, which does not serve as collateral for the mortgage, may be a source of optimism for the property. The owner of the vacant Sears parcel, Seritage Growth Properties, is moving forward with a residential development to replace the empty parcel. This example of manufacturing of demand and foot traffic for the property by way of building multifamily and residential is one method of counteracting weaker fundamentals for regional malls.

With limited mall transactions taking place in recent years, one of CRED iQ’s comps for Plaza West Covina is the 2021 sale of Eagle Rock Plaza, a 466,000-sf Los Angeles-area mall that sold for $76 million, equal to $164/sf. Eagle Rock Plaza is inferior to Plaza West Covina in many aspects of viability as a regional mall and was also REO at the time of sale, which qualifies the transaction as a distressed sale and serves as a potential low watermark for Plaza West Covina on a price per square foot basis. Unibail-Rodamco-Westfield’s Santa Anita Mall and CIM Group’s Montclair Plaza fall within the competitive set for Plaza West Covina as well. For the full valuation report and property-level details, click here.

Property Name	P laza West Covin a
Address	^{112 Plaza Drive West Covina, CA 91790}
Allocated Loan Amount	$144,149,196
Collateral Size	667,814 sf
Anchor Boxes	JCPenney Macy’s Residential Development (former Sears)
Key Collateral Tenants	Best Buy Nordstrom Rack Gold’s Gym
Most Recent Appraisal	$215,000,000 ($322/sf)
Most Recent Appraisal Date	11/20/2021

Franklin Park Mall

1.3 million sf, Regional Mall, Toledo, OH [View Details]

Franklin Park Mall is located in suburban Toledo, OH, approximately 6 miles outside of downtown. The mall, of which only 705,503 sf serves as collateral for the mortgage, has the second-highest amount of debt allocated to it in the amount of $119.4 million. Prior to loan origination, the mall was appraised for $284 million, equal to $403/sf. An updated November 2021 appraisal valued the property at $82.8 million, which was equal to $117/sf and represented a 71% decline in value since 2018. The decline in appraisal values from origination to 2021 was the second-largest among the five malls in the portfolio.

The highlight of Franklin Park Mall’s tenant roster is an Apple Store, which serves as primary driver of foot traffic for the property. The next closest Apple Store is located about 40 miles north at Simon Property Group’s Briarwood Mall in Ann Arbor, MI. In terms of traditional box anchors, Franklin Park Mall features a JCPenney, Dillard’s, and Macy’s; although, none of these parcels serve as collateral for the mortgage. The mall has also had some evolution in the make up of its in-line tenants after the departures of some national brands, such as Banana Republic, and the opening of a few locally-owned tenants.

In addition to Briarwood Mall, another one of CRED iQ’s comps for Franklin Park Mall is Brookfield Properties’ Glenbrook Square Mall, which is located in Fort Wayne, IN. This 1 million-sf mall was appraised in October 2021 for a value of $104 million, equal to $104/sf. Comparatively speaking, Glenbrook Square only has a JCPenney and a Macy’s as operational anchors and does not have an Apple Store. However, both Briarwood Mall and Glenbrook Square Mall fall within the competitive set for Franklin Park Mall. For the full valuation report and property-level details, click here.

Property Name	Franklin Park Mall
Address	^{5001 Monroe Street Toledo, OH 43623}
Allocated Loan Amount	$119,353,843
Collateral Size	705,503 sf
Anchor Boxes	JCPenney Dillard’s Macy’s
Key Collateral Tenants	Cinemark Dick’s Sporting Goods Apple
Most Recent Appraisal	$82,800,000 ($117/sf)
Most Recent Appraisal Date	11/10/2021

Parkway Plaza Mall

1.3 million sf, Regional Mall, El Cajon, CA [View Details]

Parkway Plaza is a regional mall located within the San Diego MSA in El Cajon, CA, which is approximately 15 miles east of the Pacific Coast. The mall is the second-most valuable of the portfolio on a price per square foot basis. Of the mall’s total 1.3 million-sf footprint, only 944,728 sf is collateral for the mortgage. The property has approximately $110.5 million of the total mortgage debt allocated to it. A November 2021 appraisal valued the property at $155 million, equal to $164/sf. The updated appraisal represented a 41% decline from an appraisal value of $263 million, equal to $278/sf, from prior to loan origination.

The mall’s primary tenant and anchor is Walmart, which leases 160,000 sf, or about 17% of the property’s NRA, pursuant to a lease that expires in October 2024. With Walmart’s lease expiration less than 3 years away, the probability of a lease renewal is a key factor in evaluating the mall’s performance over the near to intermediate term. There are 4 other Walmart locations within a 5-mile radius of the Parkway Plaza location.

CRED iQ’s competitive set for Parkway Plaza Mall includes Unibail-Rodamco-Westfield’s M ission Valley Ma ll, located 12 miles west in a more central location to San Diego’s central business district. The Mission Valley Mall features a Target, Macy’s, and Bed Bath & Beyond.

Parkway Plaza Mall features traditional anchor boxes in the form of JCPenney and Macy’s, but neither of the buildings serve as a collateral for the loan. A positive attribute for the mall is the redevelopment by Seritage Growth Properties of a formerly vacant Sears parcel into a multi-tenant retail complex that features Burlington, Bob’s Discount Furniture, and an Ashley Homestore. For the full valuation report and property level-details, click here.

Property Name	Parkway Plaza Mall
Address	^{415 Parkway Plaza El Cajon, CA 92020}
Allocated Loan Amount	$110,528,407
Collateral Size	944,728 sf
Anchor Boxes	Walmart JCPenney Macy’s
Key Collateral Tenants	Walmart Regal Cinemas Dick’s Sporting Goods
Most Recent Appraisal	$155,000,000 ($164/sf)
Most Recent Appraisal Date	11/16/2021

Capital Mall

804,065 sf, Regional Mall, Olympia, WA [View Details]

Capital Mall is located in Olympia, WA, approximately 65 miles southwest of Seattle, WA. Approximately $85.7 million of the total mortgage amount is allocated to the mall. The property features a traditional single-story linear layout of enclosed stores as well as several walk-up outparcel buildings located just north of the mall loop. The property was appraised for $204 million, equal to $254/sf, prior to loan origination but an updated appraisal from November 2021 stated a value of $69.4 million, equal to $86/sf. The difference in appraisal values is equal to a 66% decline.

Capital Mall has two traditional anchor boxes, Macy’s and JCPenney, as well as multiple junior anchors, Century Theatres, Dick’s Sporting Goods, and Best Buy. At one time, 24-Hour Fitness was the second-highest paying tenant at the property when it occupied one of the mall’s outparcel buildings, but the tenant vacated prior to its lease expiration in 2022.

CRED iQ’s best comp for the Capital Mall is Kitsap Mall, located 70 miles north in Silverdale, WA. Kitsap Mall was also formerly owned by Starwood Capital Group but became REO in December 2021. The potential future sale of Kitsap Mall will provide meaningful valuation guidance for Capital Mall when it occurs. Kitsap Mall also features a JCPenney and a Macy’s and has an in-line tenant profile that is similar to Capital Mall. For the full valuation report and property-level details, click here.

Property Name	Capital Mall
Address	^{625 Black Lake Boulevard Olympia, WA 98502}
Allocated Loan Amount	$85,733,054
Collateral Size	804,065 sf
Anchor Boxes	Macy’s JCPenney
Key Collateral Tenants	Dick’s Sporting Goods Century Theatres Best Buy
Most Recent Appraisal	$69,400,000 ($86/sf)
Most Recent Appraisal Date	11/10/2021

Great Northern Mall

1.2 million sf, Regional Mall, North Olmsted, OH [View Details]

Great Northern Mall is located within the Cleveland, OH MSA in North Olmsted, OH, which is approximately 15 miles outside of Cleveland’s CBD. The total size of the mall is approximately 1.2 million sf; however, only 606,933 sf of the property serves as collateral for the mortgage. The allocated mortgage debt amount for the property is $59.3 million. The property has lost foot traffic, prospective tenants, and overall commerce to nearby Crocker Park, a mixed-use, open-air lifestyle center that possesses the live, work, and play features that are highly sought after in retail developments. Phase 3 of Crocker Park was featured in last week’s WAR Report, which provided a lending landscape analysis for trends in newly originated commercial mortgages.

The Great Northern Mall was appraised for $39.4 million, equal to $65/sf, in November 2021. The updated appraisal value represented a 72% decline compared to the property’s appraisal at loan origination of $141 million, or $232/sf. Of the five properties in the Starwood Mall Portfolio, this property exhibited the greatest decline in value from loan origination through 2021.

Great Northern Mall does not feature any compelling drivers of foot traffic. Traditional anchor boxes include Macy’s, Dillard’s, JCPenney, and a vacant former Sears parcel. None of these buildings serve as collateral for the mortgage loan, although JCPenney pays ground rent. The vacant Sears parcel was sold in 2021 for $7.8 million, equal to $43/sf. Although not a comp in the traditional sense, the transaction provides a reference point for the collateral portion of the Great Northern Mall. For the full valuation report and property-level details, click here.

Property Name	Great Northern Mall
Address	^{4954 Great Northern Mall North Olmsted, OH 44070}
Allocated Loan Amount	$59,256,644
Collateral Size	606,933 sf
Anchor Boxes	Macy’s Dillard’s JCPenney Vacant Former Sears
Key Collateral Tenants	Regal Cinemas Dick’s Sporting Goods Forever 21
Most Recent Appraisal	$39,400,000 ($65/sf)
Most Recent Appraisal Date	11/10/2021

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About CRED iQ

Market Delinquency Tracker – March 2022

CRED iQ

March 2, 2022

CRED iQ monitors distressed rates (DQ + SS%) and market performance for nearly 400 MSAs across the United States, covering over $900 billion in outstanding CRE debt. Distressed rates and month-over-month changes are presented below, by property type, for the 50 largest markets.

*Distressed figures include all properties listed 30 days delinquent or worse, as well as specially serviced loans within the securitized universe including Conduit, Agency, SBLL, and CRE CLO.*

Pockets of distress have materialized across various markets in the office sector over the past month. Birmingham, AL, New Orleans, and Baltimore exhibited the highest increases in office distress, accounting for 3 of the Top 10 increases in distress by market-sector in February 2022. The Birmingham market was impacted by two office properties — Wells Fargo Tower and Inverness Center — transferring to special servicing. The two properties, along with an office building in Columbia, SC, secure a $129.2 million mortgage that is at risk of imminent monetary default, according to the latest servicer commentary.

In addition to office, the retail sector exhibited some volatility, accounting for 3 of the Top 10 increases in distress and three of the Top 10 decreases in distress. The Nashville retail market benefitted from a decline in distress following the cure of CoolSprings Galleria — a 640,176-sf regional mall that secures a $145.6 million mortgage. The loan had transferred to special servicing due to bankruptcy of its sponsor, CBL Properties. CBL Properties was able to complete a restructuring, which then enabled the loan to return to the master servicer. CoolSprings Galleria is one of CBL Properties’ higher quality regional malls.

Another sector with notable improvements in February was the Chicago hotel market. The improvement was primary driven by the delinquency cure of the $95.9 million Marriott Chicago River North Hotel and its subsequent return to the master servicer. The loan had been in special servicing since July 2020 due to pandemic-related issues. Despite the improvement, the rate of distress for Chicago hotels is still one of the highest among the Top 50 MSAs, equal to 43.9% this month.

The distressed rate for the Louisville market improved this month after the $73.6 million Oxmoor Center loan returned to the master servicer as a corrected mortgage. The loan was modified and its maturity date was extended from June 2021 to June 2024. Oxmoor Center is a 941,756-sf regional mall, owned by Brookfield Properties, and features an Apple store as one of its primary drivers of traffic. Anchor boxes include Macy’s, Von Maur, Dick’s Sporting Goods and a vacant former Sears. As a result of this loan’s return to the master servicer, the Louisville market had the greatest month-over-month decline among all rates of distress; however, Louisville still has the second-highest overall distressed rate among the Top 50 MSAs.

The Minneapolis MSA has the highest overall distressed rate at 22.9%, which was slightly lower than the prior month. Louisville (17.9%), New Orleans (13.9%), Cleveland (11.8%), and Milwaukee (10.1%) comprise the remaining markets with the highest rates of distress. The Raleigh market (0.28%) had the lowest percentage of distress among the Top 50 MSAs for the second month in a row. Additionally, Boston (0.91%) exhibited recoveries in delinquency and special servicing to rank as one of the five markets with the lowest amount distress.

For the full CRED DQ Report, download here:

CRED-iQ-Market-Delinquency-Tracker-March-2022 Download

MSA – Property Type	DQ/SS (millions)	DS/SS (%)	Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA	$78.6	2.5%	-0.4%
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	$59.3	17.7%	-3.2%
Allentown – Other	$0.0	0.0%	0.0%
Allentown – Retail	$19.3	5.2%	-4.5%
Allentown – Self Storage	$0.0	0.0%	0.0%
Atlanta-Sandy Springs-Marietta, GA MSA	$751.5	2.9%	-0.1%
Atlanta – Hotel	$213.4	11.5%	0.2%
Atlanta – Industrial	$18.0	3.1%	1.3%
Atlanta – Multifamily	$03.0	0.0%	0.0%
Atlanta – Office	$07.6	0.2%	0.0%
Atlanta – Other	$0.0	0.0%	0.0%
Atlanta – Retail	$509.5	19.2%	-1.2%
Atlanta – Self Storage	$0.0	0.0%	0.0%
Austin-Round Rock, TX MSA	$198.0	2.2%	0.1%
Austin – Hotel	$51.8	6.1%	-0.8%
Austin – Industrial	$0.0	0.0%	0.0%
Austin – Multifamily	$57.7	1.0%	0.4%
Austin – Office	$0.0	0.0%	0.0%
Austin – Other	$0.0	0.0%	0.0%
Austin – Retail	$85.9	9.1%	-2.4%
Austin – Self Storage	$02.6	2.9%	0.0%
Baltimore-Towson, MD MSA	$418.1	4.4%	0.1%
Baltimore – Hotel	$111.2	25.2%	-0.1%
Baltimore – Industrial	$0.0	0.0%	0.0%
Baltimore – Multifamily	$06.1	0.1%	0.0%
Baltimore – Office	$33.4	5.3%	1.4%
Baltimore – Other	$11.8	3.2%	0.0%
Baltimore – Retail	$255.7	22.5%	-1.2%
Baltimore – Self Storage	$0.0	0.0%	0.0%
Birmingham – Birmingham-Hoover, AL MSA	$159.1	5.8%	3.2%
Birmingham – Hotel	$39.7	38.3%	-0.2%
Birmingham – Industrial	$0.0	0.0%	0.0%
Birmingham – Multifamily	$0.0	0.0%	0.0%
Birmingham – Office	$96.6	19.0%	19.0%
Birmingham – Other	$0.0	0.0%	0.0%
Birmingham – Retail	$22.8	3.1%	-0.1%
Birmingham – Self Storage	$0.0	0.0%	0.0%
Boston – Boston-Cambridge-Quincy, MA-NH MSA	$157.5	0.9%	-0.1%
Boston – Hotel	$45.3	6.5%	-0.2%
Boston – Industrial	$0.0	0.0%	0.0%
Boston – Multifamily	$0.0	0.0%	-0.2%
Boston – Office	$0.0	0.0%	0.0%
Boston – Other	$0.0	0.0%	0.0%
Boston – Retail	$112.2	5.7%	-0.5%
Boston – Self Storage	$0.0	0.0%	0.0%
Bridgeport – Bridgeport-Stamford-Norwalk, CT MSA	$221.3	5.6%	-0.2%
Bridgeport – Hotel	$62.6	51.0%	-0.1%
Bridgeport – Industrial	$17.8	15.0%	0.9%
Bridgeport – Multifamily	$0.9	0.1%	-0.1%
Bridgeport – Office	$108.3	8.5%	-1.5%
Bridgeport – Other	$09.8	2.4%	0.0%
Bridgeport – Retail	$21.7	6.7%	-0.5%
Bridgeport – Self Storage	$0.0	0.0%	0.0%
Charlotte – Charlotte-Gastonia-Concord, NC-SC MSA	$285.5	3.6%	0.0%
Charlotte – Hotel	$87.6	7.4%	0.0%
Charlotte – Industrial	$0.0	0.0%	0.0%
Charlotte – Multifamily	$0.7	0.0%	0.0%
Charlotte – Office	$21.3	2.3%	0.0%
Charlotte – Other	$85.0	26.8%	1.5%
Charlotte – Retail	$90.9	7.8%	-0.4%
Charlotte – Self Storage	$0.0	0.0%	0.0%
Chicago – Chicago-Naperville-Joliet, IL-IN-WI MSA	$2,338.5	8.8%	-0.5%
Chicago – Hotel	$920.1	43.9%	-4.0%
Chicago – Industrial	$03.8	0.2%	0.0%
Chicago – Multifamily	$121.9	1.3%	0.0%
Chicago – Office	$773.4	10.0%	-0.7%
Chicago – Other	$256.1	13.4%	0.7%
Chicago – Retail	$263.2	7.8%	-0.4%
Chicago – Self Storage	$0.0	0.0%	0.0%
Cincinnati – Cincinnati-Middletown, OH-KY-IN MSA	$277.8	7.2%	-0.7%
Cincinnati – Hotel	$126.5	41.8%	-0.5%
Cincinnati – Industrial	$0.0	0.0%	0.0%
Cincinnati – Multifamily	$0.0	0.0%	0.0%
Cincinnati – Office	$0.0	0.0%	-3.3%
Cincinnati – Other	$15.6	5.3%	0.0%
Cincinnati – Retail	$134.6	19.7%	-2.7%
Cincinnati – Self Storage	$01.0	1.7%	-0.2%
Cleveland – Cleveland-Elyria-Mentor, OH MSA	$468.4	11.7%	-0.5%
Cleveland – Hotel	$97.1	49.8%	-2.3%
Cleveland – Industrial	$0.0	0.0%	0.0%
Cleveland – Multifamily	$03.3	0.2%	-0.3%
Cleveland – Office	$104.3	12.8%	-0.3%
Cleveland – Other	$176.3	40.5%	-2.4%
Cleveland – Retail	$87.4	12.4%	-0.4%
Cleveland – Self Storage	$0.0	0.0%	0.0%
Columbus, OH – Columbus, OH MSA	$240.2	3.7%	-0.4%
Columbus, OH – Hotel	$83.6	27.0%	0.3%
Columbus, OH – Industrial	$11.9	3.2%	-0.2%
Columbus, OH – Multifamily	$0.0	0.0%	-0.1%
Columbus, OH – Office	$12.4	2.1%	-0.3%
Columbus, OH – Other	$0.0	0.0%	0.0%
Columbus, OH – Retail	$121.4	14.8%	-0.2%
Columbus, OH – Self Storage	$11.0	18.0%	-1.0%
Dallas-Fort Worth-Arlington, TX MSA	$545.2	1.7%	-0.2%
Dallas – Hotel	$239.5	6.8%	0.1%
Dallas – Industrial	$01.7	0.1%	0.0%
Dallas – Multifamily	$05.2	0.0%	-0.2%
Dallas – Office	$102.8	2.8%	-1.4%
Dallas – Other	$23.6	1.1%	0.0%
Dallas – Retail	$160.5	6.6%	-0.3%
Dallas – Self Storage	$11.9	3.2%	-0.2%
Denver-Aurora, CO MSA	$344.6	2.1%	0.0%
Denver – Hotel	$36.0	4.2%	0.0%
Denver – Industrial	$0.0	0.0%	0.0%
Denver – Multifamily	$0.7	0.0%	0.0%
Denver – Office	$183.3	9.2%	-0.5%
Denver – Other	$66.5	7.0%	-0.1%
Denver – Retail	$54.8	3.8%	-0.1%
Denver – Self Storage	$03.3	1.9%	-0.1%
Detroit-Warren-Livonia, MI MSA	$490.1	5.3%	0.1%
Detroit – Hotel	$213.9	30.2%	-0.9%
Detroit – Industrial	$18.5	3.3%	-0.2%
Detroit – Multifamily	$33.6	0.9%	0.1%
Detroit – Office	$0.0	0.0%	0.0%
Detroit – Other	$22.2	3.6%	-0.1%
Detroit – Retail	$201.9	11.7%	1.2%
Detroit – Self Storage	$0.0	0.0%	0.0%
Hartford-West Hartford-East Hartford, CT MSA	$199.6	8.1%	0.2%
Hartford – Hotel	$75.4	55.2%	-0.6%
Hartford – Industrial	$0.0	0.0%	0.0%
Hartford – Multifamily	$06.5	0.5%	0.5%
Hartford – Office	$87.6	22.0%	-0.3%
Hartford – Other	$0.0	0.0%	0.0%
Hartford – Retail	$30.1	12.8%	-0.3%
Hartford – Self Storage	$0.0	0.0%	0.0%
Houston-Sugar Land-Baytown, TX MSA	$1,678.0	7.0%	1.6%
Houston – Hotel	$590.5	49.7%	-2.9%
Houston – Industrial	$04.2	0.8%	-0.1%
Houston – Multifamily	$28.9	0.2%	-0.1%
Houston – Office	$490.7	12.0%	-0.5%
Houston – Other	$0.0	0.0%	0.0%
Houston – Retail	$533.8	13.4%	10.5%
Houston – Self Storage	$29.9	7.6%	-0.5%
Indianapolis-Carmel, IN MSA	$283.3	5.2%	-0.8%
Indianapolis – Hotel	$81.9	13.4%	-4.2%
Indianapolis – Industrial	$0.0	0.0%	0.0%
Indianapolis – Multifamily	$74.5	2.7%	-0.5%
Indianapolis – Office	$75.3	12.3%	-0.5%
Indianapolis – Other	$09.7	2.9%	0.1%
Indianapolis – Retail	$37.8	7.3%	-0.1%
Indianapolis – Self Storage	$04.0	5.9%	0.5%
Jacksonville, FL MSA	$54.9	1.0%	0.0%
Jacksonville – Hotel	$38.4	9.1%	-0.3%
Jacksonville – Industrial	$0.0	0.0%	0.0%
Jacksonville – Multifamily	$04.9	0.1%	0.1%
Jacksonville – Office	$0.0	0.0%	0.0%
Jacksonville – Other	$0.0	0.0%	0.0%
Jacksonville – Retail	$11.5	2.6%	-0.2%
Jacksonville – Self Storage	$0.0	0.0%	0.0%
Kansas City, MO-KS MSA	$115.5	2.3%	0.6%
Kansas City – Hotel	$50.2	18.7%	6.8%
Kansas City – Industrial	$0.0	0.0%	0.0%
Kansas City – Multifamily	$07.5	0.3%	-0.2%
Kansas City – Office	$0.0	0.0%	0.0%
Kansas City – Other	$02.8	1.2%	0.0%
Kansas City – Retail	$53.3	7.5%	1.6%
Kansas City – Self Storage	$01.7	0.8%	0.0%
Las Vegas-Paradise, NV MSA	$350.1	1.8%	0.0%
Las Vegas – Hotel	$18.3	0.3%	0.0%
Las Vegas – Industrial	$0.0	0.0%	0.0%
Las Vegas – Multifamily	$0.0	0.0%	0.0%
Las Vegas – Office	$21.8	3.2%	-1.2%
Las Vegas – Other	$0.0	0.0%	0.0%
Las Vegas – Retail	$307.3	6.4%	-0.1%
Las Vegas – Self Storage	$02.8	1.4%	-0.1%
Los Angeles-Long Beach-Santa Ana, CA MSA	$1,266.1	2.5%	-0.1%
Los Angeles – Hotel	$460.6	9.9%	-2.3%
Los Angeles – Industrial	$02.0	0.2%	0.0%
Los Angeles – Multifamily	$129.4	0.6%	0.0%
Los Angeles – Office	$73.7	0.6%	0.0%
Los Angeles – Other	$72.0	2.3%	-0.1%
Los Angeles – Retail	$528.3	7.8%	-0.2%
Los Angeles – Self Storage	$0.0	0.0%	0.0%
Louisville/Jefferson County, KY-IN MSA	$549.4	17.9%	-3.3%
Louisville – Hotel	$242.9	54.7%	-0.7%
Louisville – Industrial	$0.0	0.0%	0.0%
Louisville – Multifamily	$03.8	0.3%	-0.1%
Louisville – Office	$0.0	0.0%	0.0%
Louisville – Other	$0.0	0.0%	0.0%
Louisville – Retail	$302.8	47.5%	-11.6%
Louisville – Self Storage	$0.0	0.0%	0.0%
Memphis, TN-AR-MS MSA	$140.5	6.1%	0.7%
Memphis – Hotel	$40.7	22.6%	-0.7%
Memphis – Industrial	$0.0	0.0%	0.0%
Memphis – Multifamily	$17.8	1.6%	0.0%
Memphis – Office	$0.0	0.0%	0.0%
Memphis – Other	$18.4	27.9%	3.4%
Memphis – Retail	$62.0	16.2%	3.9%
Memphis – Self Storage	$01.7	1.2%	0.0%
Miami-Fort Lauderdale-Pompano Beach, FL MSA	$623.0	2.7%	-0.5%
Miami – Hotel	$231.5	5.2%	-1.1%
Miami – Industrial	$0.0	0.0%	0.0%
Miami – Multifamily	$04.4	0.1%	-0.1%
Miami – Office	$07.6	0.4%	0.0%
Miami – Other	$08.6	0.5%	0.0%
Miami – Retail	$370.9	6.7%	-1.4%
Miami – Self Storage	$0.0	0.0%	0.0%
Milwaukee-Waukesha-West Allis, WI MSA	$246.1	10.1%	-0.6%
Milwaukee – Hotel	$35.4	23.7%	0.7%
Milwaukee – Industrial	$0.0	0.0%	0.0%
Milwaukee – Multifamily	$0.0	0.0%	0.0%
Milwaukee – Office	$59.2	11.8%	0.0%
Milwaukee – Other	$0.0	0.0%	0.0%
Milwaukee – Retail	$151.5	29.1%	-2.0%
Milwaukee – Self Storage	$0.0	0.0%	0.0%
Minneapolis-St. Paul-Bloomington, MN-WI MSA	$1,892.3	22.9%	-0.2%
Minneapolis – Hotel	$308.4	50.7%	-0.3%
Minneapolis – Industrial	$0.0	0.0%	0.0%
Minneapolis – Multifamily	$0.0	0.0%	0.0%
Minneapolis – Office	$140.5	6.9%	-0.6%
Minneapolis – Other	$11.6	2.8%	0.2%
Minneapolis – Retail	$1,431.8	73.3%	-1.8%
Minneapolis – Self Storage	$0.0	0.0%	0.0%
Nashville-Davidson-Murfreesboro-Franklin, TN MSA	$248.1	3.9%	-2.2%
Nashville – Hotel	$238.6	16.6%	-1.7%
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	$0.0	0.0%	0.0%
Nashville – Retail	$09.5	1.2%	-17.1%
Nashville – Self Storage	$0.0	0.0%	0.0%
New Orleans-Metairie-Kenner, LA MSA	$467.6	13.9%	-0.9%
New Orleans – Hotel	$388.4	38.1%	-3.2%
New Orleans – Industrial	$0.0	0.0%	0.0%
New Orleans – Multifamily	$13.9	1.7%	0.0%
New Orleans – Office	$27.5	5.6%	2.0%
New Orleans – Other	$15.3	7.9%	7.7%
New Orleans – Retail	$22.6	3.2%	0.0%
New Orleans – Self Storage	$0.0	0.0%	0.0%
New York-Northern New Jersey-Long Island, NY-NJ-PA MSA	$5,921.5	4.8%	-0.6%
New York City – Hotel	$1,576.8	42.6%	0.9%
New York City – Industrial	$07.4	0.4%	-0.1%
New York City – Multifamily	$494.7	1.4%	0.0%
New York City – Office	$1,116.7	2.5%	-0.9%
New York City – Other	$1,280.2	5.5%	-1.0%
New York City – Retail	$1,445.7	10.5%	-0.7%
New York City – Self Storage	$0.0	0.0%	0.0%
Orlando-Kissimmee, FL MSA	$168.7	1.6%	-0.1%
Orlando – Hotel	$79.7	2.8%	-0.4%
Orlando – Industrial	$0.0	0.0%	0.0%
Orlando – Multifamily	$01.9	0.0%	0.0%
Orlando – Office	$47.1	9.7%	0.1%
Orlando – Other	$0.0	0.0%	0.0%
Orlando – Retail	$40.1	4.8%	-1.3%
Orlando – Self Storage	$0.0	0.0%	0.0%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA	$822.1	4.5%	0.0%
Philadelphia – Hotel	$303.0	33.7%	-0.3%
Philadelphia – Industrial	$0.0	0.0%	0.0%
Philadelphia – Multifamily	$111.3	1.3%	0.1%
Philadelphia – Office	$136.2	3.3%	0.0%
Philadelphia – Other	$47.7	3.5%	-0.1%
Philadelphia – Retail	$223.8	8.8%	-0.5%
Philadelphia – Self Storage	$0.0	0.0%	0.0%
Phoenix-Mesa-Scottsdale, AZ MSA	$251.4	1.4%	0.0%
Phoenix – Hotel	$38.8	2.3%	-0.1%
Phoenix – Industrial	$10.1	3.5%	1.5%
Phoenix – Multifamily	$0.0	0.0%	0.0%
Phoenix – Office	$23.7	1.0%	-0.1%
Phoenix – Other	$15.5	1.8%	-0.3%
Phoenix – Retail	$163.3	7.2%	-0.7%
Phoenix – Self Storage	$0.0	0.0%	0.0%
Pittsburgh, PA MSA	$96.2	2.0%	-0.2%
Pittsburgh – Hotel	$65.1	25.3%	-1.9%
Pittsburgh – Industrial	$0.0	0.0%	0.0%
Pittsburgh – Multifamily	$0.0	0.0%	0.0%
Pittsburgh – Office	$15.3	1.4%	-0.2%
Pittsburgh – Other	$08.0	1.8%	-0.3%
Pittsburgh – Retail	$07.8	1.2%	0.0%
Pittsburgh – Self Storage	$0.0	0.0%	0.0%
Portland-Vancouver-Beaverton, OR-WA MSA	$501.7	7.4%	0.0%
Portland – Hotel	$470.8	54.2%	-0.3%
Portland – Industrial	$0.0	0.0%	0.0%
Portland – Multifamily	$10.2	0.2%	0.0%
Portland – Office	$20.8	5.3%	-0.8%
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-Cary, NC MSA	$09.5	0.3%	-0.1%
Raleigh – Hotel	$09.5	3.0%	-0.7%
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, VA MSA	$82.3	2.4%	-1.2%
Richmond – Hotel	$0.0	0.0%	-14.1%
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	$82.3	14.6%	-0.8%
Richmond – Self Storage	$0.0	0.0%	0.0%
Riverside-San Bernardino-Ontario, CA MSA	$308.1	3.2%	-0.7%
Riverside – Hotel	$84.2	26.9%	0.9%
Riverside – Industrial	$0.0	0.0%	0.0%
Riverside – Multifamily	$02.4	0.1%	-0.1%
Riverside – Office	$0.0	0.0%	0.0%
Riverside – Other	$0.0	0.0%	0.0%
Riverside – Retail	$221.5	10.6%	-3.0%
Riverside – Self Storage	$0.0	0.0%	0.0%
Sacramento-Arden-Arcade-Roseville, CA MSA	$25.5	0.4%	-0.1%
Sacramento – Hotel	$05.8	1.6%	0.0%
Sacramento – Industrial	$0.0	0.0%	0.0%
Sacramento – Multifamily	$0.0	0.0%	0.0%
Sacramento – Office	$06.1	0.8%	-1.2%
Sacramento – Other	$0.0	0.0%	0.0%
Sacramento – Retail	$13.6	1.7%	0.0%
Sacramento – Self Storage	$0.0	0.0%	0.0%
Salt Lake City, UT MSA	$47.0	1.2%	0.0%
Salt Lake City – Hotel	$47.0	16.3%	-0.3%
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, TX MSA	$140.9	2.2%	0.0%
San Antonio – Hotel	$08.4	2.5%	0.0%
San Antonio – Industrial	$0.0	0.0%	0.0%
San Antonio – Multifamily	$0.0	0.0%	0.0%
San Antonio – Office	$0.0	0.0%	0.0%
San Antonio – Other	$0.0	0.0%	0.0%
San Antonio – Retail	$131.0	14.3%	-0.7%
San Antonio – Self Storage	$01.5	1.0%	-0.1%
San Diego-Carlsbad-San Marcos, CA MSA	$214.5	1.9%	-0.5%
San Diego – Hotel	$79.2	4.0%	-2.3%
San Diego – Industrial	$0.0	0.0%	0.0%
San Diego – Multifamily	$0.0	0.0%	0.0%
San Diego – Office	$0.0	0.0%	0.0%
San Diego – Other	$20.6	2.9%	-0.4%
San Diego – Retail	$114.8	9.3%	-0.4%
San Diego – Self Storage	$0.0	0.0%	0.0%
San Francisco-Oakland-Fremont, CA MSA	$325.5	1.3%	0.1%
San Francisco – Hotel	$171.7	7.3%	-1.0%
San Francisco – Industrial	$0.0	0.0%	0.0%
San Francisco – Multifamily	$20.0	0.3%	0.0%
San Francisco – Office	$55.6	0.5%	0.4%
San Francisco – Other	$30.6	1.7%	-0.1%
San Francisco – Retail	$47.7	4.1%	0.4%
San Francisco – Self Storage	$0.0	0.0%	0.0%
San Jose-Sunnyvale-Santa Clara, CA MSA	$104.1	0.7%	0.0%
San Jose – Hotel	$89.4	4.3%	-0.2%
San Jose – Industrial	$0.0	0.0%	0.0%
San Jose – Multifamily	$0.0	0.0%	0.0%
San Jose – Office	$14.7	0.2%	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-Tacoma-Bellevue, WA MSA	$109.2	0.6%	0.0%
Seattle – Hotel	$109.2	8.3%	0.6%
Seattle – Industrial	$0.0	0.0%	0.0%
Seattle – Multifamily	$0.0	0.0%	0.0%
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, MO-IL MSA	$414.6	9.8%	0.4%
St. Louis – Hotel	$58.2	20.7%	6.1%
St. Louis – Industrial	$0.0	0.0%	0.0%
St. Louis – Multifamily	$24.3	1.5%	0.1%
St. Louis – Office	$107.1	19.2%	0.0%
St. Louis – Other	$26.4	4.8%	0.0%
St. Louis – Retail	$198.6	20.0%	-0.4%
St. Louis – Self Storage	$0.0	0.0%	0.0%
Tampa-St. Petersburg-Clearwater, FL	$300.1	3.3%	0.0%
Tampa – Hotel	$30.0	2.6%	-0.1%
Tampa – Industrial	$0.0	0.0%	0.0%
Tampa – Multifamily	$02.6	0.0%	0.0%
Tampa – Office	$23.8	4.0%	-0.2%
Tampa – Other	$0.0	0.0%	0.0%
Tampa – Retail	$243.8	26.9%	0.6%
Tampa – Self Storage	$0.0	0.0%	0.0%
Tucson, AZ MSA	$166.8	5.4%	-0.2%
Tucson – Hotel	$04.7	1.9%	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	$162.1	20.2%	-3.7%
Tucson – Self Storage	$0.0	0.0%	0.0%
Virginia Beach-Norfolk-Newport News, VA-NC MSA	$211.7	4.7%	-0.2%
Virginia Beach – Hotel	$12.1	2.7%	0.6%
Virginia Beach – Industrial	$21.2	6.7%	-6.7%
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	$178.4	20.7%	-0.2%
Virginia Beach – Self Storage	$0.0	0.0%	0.0%
Washington-Arlington-Alexandria, DC-VA-MD-WV MSA	$611.3	2.2%	-0.8%
Washington, DC – Hotel	$44.2	4.8%	-0.3%
Washington, DC – Industrial	$11.2	2.0%	0.0%
Washington, DC – Multifamily	$01.3	0.0%	0.0%
Washington, DC – Office	$357.0	5.3%	-0.7%
Washington, DC – Other	$44.7	2.8%	-10.7%
Washington, DC – Retail	$153.0	5.5%	-0.1%
Washington, DC – Self Storage	$0.0	0.0%	0.0%
Grand Total	$25,921.4	3.9%	-0.2%

About CRED iQ

Recent Commercial Mortgage Originations

CRED iQ

March 2, 2022

This week, CRED iQ reviewed the commercial real estate lending landscape and highlighted 5 properties that have secured financing in February 2022. The highlighted loan originations cover several property types (retail, mixed use, and multifamily), giving a broad range of financing deals that have been completed across a range of MSAs such as Detroit, Kansas City, Cleveland and Los Angeles.

Using the CRED iQ platform’s Comps functionality, which features propriety Comps scoring for the CRE loan universe, we compared lending terms and loan structures to get a sense of the trends in the CRE lending environment. Additionally, we provided valuations for each asset to evaluate leverage levels in relation to originators’ LTVs. The CRED iQ valuations factor in a base-case (most likely), a downside (significant loss of tenants), and dark scenarios (100% vacant). Base-case valuations for select properties are provided below. 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.

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Midtown Square

580,251 sf, Power Center, Troy, MI

An $80.4 million loan was originated by Morgan Stanley on February 14, 2022 to refinance existing debt on a power center in Troy, MI, located about 18 miles outside of Detroit. Part of the proceeds from the new origination, totaling approximately $20 million, were used to fund a guarantor reserve due to the absence of a non-recourse carveout guarantor. The guarantor reserve funds may be released after an acceptable guarantor is put into place. The 10-year loan was structured with an interest rate of 4.00% and an initial two-year interest-only period. The loan will be locked out from prepayment for 2 years, and defeasance will be permitted after lockout through the remainder of the loan term until its open period, 5 months prior to maturity.

Using CRED iQ’s Comps functionality, the closest comparable origination was a two-property portfolio loan secured in part by The Forum At Gateways retail center in Sterling Heights, MI. The loan was originated in September 2019 and had an interest rate of 3.94%. The Forum At Gateways is anchored by a Walmart and an LA Fitness. Of note, the comparable loan has been in special servicing since July 2020.

Midtown Square is anchored by Home Depot, Target, Kohl’s, and Kroger. Altogether, the four anchors account for 77% of the property’s NRA. Home Depot and Target have scheduled lease expirations in January 2026 and the Kohl’s lease expires in January 2027. However, all three tenants have several multi-year extension options. The property was 99% occupied as of January 2022 and was appraised at a value of $127.8 million ($220/sf) as of December 2, 2021. The appraisal resulted in an LTV of 63%, and an implied cap rate of 5.58% based on the originator’s underwritten NCF. The debt yield came in at 8.9%, also based on NCF from the originator’s underwriting. For the full valuation report and loan-level details, click here.

Subject Property
Name	Midtown Square
Address	^{1237 Coolidge Highway Troy, MI 48084}
Property Type	Retail
Propety Subtype	Power Center
Building Size	580,251 sf
Year Built	2000
Submarket	Troy South
County	Oakland
MSA	Detroit-Warren-Livonia, MI
Origination Date	2/14/2022
Loan Amount	$80,430,000
Interest Rate	4.00%
Valuation
Appraised Value	$127,800,000 ($220/sf)
Appraisal Date	12/2/2021
Appraisal LTV	62.9%
CRED iQ Base-Case Value	$116,300,000 ($200/sf)

Cimarron Apartments

191 units, Multifamily, Independence, MO

In addition to CMBS, Freddie Mac, and Ginnie Mae, CRED iQ also offers data from loans contributed to Fannie Mae securitizations. Greystone Servicing Company originated a $19.7 million Fannie Mae mortgage on February 7, 2022. The loan was structured with a 12-year term and had an interest rate of 3.96%. The loan has an initial 3-year interest-only period followed by a 30-year amortization schedule. CRED iQ’s highest scoring loan comp was a $6.8 million mortgage secured by Blue Valley Court Townhomes, a 165-unit multifamily property located 2 miles away in Kansas City, MO. The comparable loan was originated in March 2020 and had an interest rate of 3.64%. Cimarron Apartments appraised for $26.5 million, equal to $138,743/unit, as of January 11, 2022, which resulted in an LTV of 74.3% and implied a cap rate of 5.30%. For the full valuation report and loan-level details, click here.

Subject Property
Name	Cimarron Apartments
Address	^{525 Stone Arch Drive Independence, MO 64052}
Property Type	Multifamily
Propety Subtype	Townhome
Building Size	191 units
Year Built	1940
Submarket	East Kansas City
County	Jackson
MSA	Kansas City, MO-KS
Origination Date	2/7/2022
Loan Amount	$19,697,000
Interest Rate	3.96%
Valuation
Appraised Value	$26,5000,000 ($138,743/unit)
Appraisal Date	1/11/2022
Appraisal LTV	74.3%
CRED iQ Base-Case Value	$24,590,000 ($128,757/unit)

Crocker Park (Phase 3)

110,352 sf, Retail, Westlake, OH

Stark Properties secured $19.5 million in mortgage debt from JP Morgan on February 4, 2021 to refinance existing debt on Phase 3 of Crocker Park, an open-air lifestyle center and mixed-use development located in Westlake, OH. The loan is structured with a 10-year term and amortizes over a 30-year schedule. The interest rate is 4.536%, which is comparatively higher than other recent originations secured by retail. The loan will be locked out from prepayment for about 2 years, and defeasance will be permitted after lockout through the remainder of the loan term until its open period, 6 months prior to maturity. Phase One and Phase Two of the Crocker Park development were previously encumbered by a $140 million mortgage that was originated in July 2016 and had an interest rate of 4.92%.

Phase 3 of Crocker Park features a town center layout with ground-floor retail below three to four-story residential components. Only the ground-floor retail components serve as collateral for the recent origination. The largest tenants are H&M (21% of the NRA), Cost Plus World Market (17% of the NRA), and buybuyBaby (13% of the NRA). Cost Plus World Market was formerly a subsidiary of Bed Bath & Beyond while buybuyBaby still is. Both tenants’ leases are scheduled to expire in 2037; however, Bed Bath & Beyond and associated retailers have exhibited willingness to close stores as part of operational efficiency assessments. CRED iQ identified examples of such closures in our January 18, 2022 WAR Report. Credit risk from the property’s primary tenants will be an ongoing concern throughout the loan’s term.

The Phase 3 retail portion of the property was appraised for $31.7 million, equal to $287/sf, as of October 21, 2021, which resulted in an LTV of 61%. The originator’s underwritten net cash flow equated to a debt yield of 9.5% and implied a cap rate of 5.84%. For the full valuation report and loan-level details, click here.

Subject Property
Name	Crocker Park (Phase 3)
Address	^{177 Market Street Westlake, OH 44145}
Property Type	Retail
Propety Subtype	Lifestyle Center
Building Size	110,352 sf
Year Built	2015
Submarket	West
County	Cuyahoga
MSA	Cleveland-Elyria-Mentor OH
Origination Date	2/4/2022
Loan Amount	$19,500,000
Interest Rate	4.54%
Valuation
Appraised Value	$31,700,000 ($287/sf)
Appraisal Date	10/21/2021
Appraisal LTV	61.4%
CRED iQ Base-Case Value	$30,040,000 ($272/sf)

Covina Palms Business Center

71,925-sf, Mixed Use (Medical Office/Retail), West Covina, CA

Bank of America funded an $11.2 million mortgage on February 11, 2022 to refinance existing debt on the Covina Palms Business Center in West Covina, CA. The interest-only loan has a 10-year term and an interest rate of 3.71%. The loan will be locked out from prepayment for 2 years, and then require a yield maintenance charge for prepayment until its open period 5 months prior to maturity in March 2032. Two of CRED iQ’s highest scoring property comps are part of a 14-property Southern California retail portfolio that secures a $214.8 million loan. The portfolio loan secured by the comparable properties, which had an interest-only structure, was originated by Argentic Real Estate Finance in April 2019 and had an interest rate of 4.06%.

The Covina Palms Business Center has the typical layout of a retail community center; however, multiple primary tenants use the space as medical offices. CRED iQ recently provided analysis on the inclusion of mixed-use collateral in CMBS and featured the various combinations of property uses including retail properties with office components such as the Covina Palms Business Center. The largest tenant, 27% of the NRA, operates as a dental practitioner. The property appraised for $22.5 million, equal to $313/sf, as of October 27, 2021, which resulted in an LTV of 50% and implied a cap rate of 5.23% based on the originator’s underwritten net cash flow. The loan also had a debt yield of 10.5% based on the originator’s underwritten net cash flow. For the full valuation report and loan-level details, click here.

Subject Property
Name	Covina Palms Business Center
Address	^{2211 East Garvey Avenue West Covina, CA 91791}
Property Type	Mixed Use
Propety Subtype	Medical Office/Retail
Building Size	71,925 sf
Year Built	1989
Submarket	Covina
County	Los Angeles
MSA	Los Angeles-Long Beach-Santa Ana, CA
Origination Date	2/14/2022
Loan Amount	$11,225,000
Interest Rate	3.71%
Valuation
Appraised Value	$22,500,000 ($313/sf)
Appraisal Date	10/27/2021
Appraisal LTV	49.9%
CRED iQ Base-Case Value	$21,610,000 ($300/sf)

Hampton Inn Texarkana

89 keys, Limited-Service Hotel, Texarkana, AR

A recent example of the lodging sector’s recovery is JP Morgan’s origination of a $5.8 million mortgage on February 3, 2022 to refinance existing debt on a hotel located along the Texas-Arkansas border in Texarkana, AR. The loan has a 10-year term and is structured to amortize on a 30-year schedule. The loan’s interest rate is 5.308% and its maturity date is in March 2032. The hotel’s franchise agreement with Hampton Inn expires in August 2031.

CRED iQ’s comp set for the Hampton Inn Texarkana is the Holiday Inn Express & Suites Texarkana East, which is part of a Starwood Capital Group portfolio of 65 hotels that secure a $577.3 million mortgage. The Hampton Inn is adjacent to the Holiday Inn Express and competes with more than 10 other lodging properties located off the exit of Interstate 30 along the state borders. The property received an appraisal equal to $8.9 million, or $100,000 per key, as of December 1, 2021 based on an expected market value assuming the completion of a property improvement plan. The LTV based on the appraisal assuming the completion of the property improvement plan is 65% with an implied cap rate of 7.65%. For the full valuation report and loan-level details, click here.

Subject Property
Name	Hampton Inn Texarkana
Address	^{5302 Crossroads Parkway Texarkana, AR 71854}
Property Type	Hospitality
Propety Subtype	Limited Service
Building Size	89 keys
Year Built	2013
Submarket	Texarkana
County	Miller
MSA	Texarkana, TX-Texarkana, AR
Origination Date	2/3/2022
Loan Amount	$5,785,000
Interest Rate	5.31%
Valuation
Appraised Value	$8,900,000 ($100,000/key)
Appraisal Date	12/1/2021
Appraisal LTV	65.0%
CRED iQ Base-Case Value	$7,745,000 ($87,027/key)

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March 2022 Delinquency Report

CRED iQ

February 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 overall delinquency rate for CMBS continued its downward trend this month with a sharp decline, representing the 21^st consecutive month-over-month improvement. The delinquency rate, equal to the percentage of all delinquent specially serviced loans and delinquent non-specially serviced loans, for CRED iQ’s s a mple universe of $500+ billion in CMBS conduit and single-asset single-borrower (SASB) loans was 4.02%, which compares to the prior month’s rate of 4.32%. 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 6.43% from 6.91%. The special servicing rate has declined for three consecutive months. Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 6.60% 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 6.87%. The overall distressed rates typically track slightly higher than special servicing rates as most delinquent loans are also with the special servicer.

Individual delinquency rates by property type declined compared to the prior month, except for a nominal increase in delinquent loans secured by industrial properties. Lodging exhibited the highest volume of improvement with nearly $200 million in delinquency cures, loans that have paid current or paid off in full after delinquency in the prior month. The lodging delinquency rate was 8.46%, which compared to 8.95% last month. The retail delinquency rate was 7.41%, a decline from 7.73% in the prior month. The spread between the lodging and retail delinquency rates has narrowed significantly over the trailing 12 months – there was 5.49% variance between lodging and retail delinquency as of February 2021 compared to a 1.05% variance as of the current month. The lodging sector has exhibited a trend of curing delinquencies more expeditiously than retail properties, indicating signs of permanent impairment within the retail sector. A crossover event — where the lodging delinquency rate declines below the retail delinquency rate — is within the range of possibilities over the course of the next year based on the delinquency trends over the past year.

One of the more notable new delinquencies this month was the $425 million Woodlands Mall loan, which is secured by a 758,231-sf regional mall in The Woodlands, TX. Additionally, the $77.1 million Bellis Fair Mall loan, secured by a 538,226-sf regional mall in Bellingham, WA, failed to pay off at maturity. The maturity default was likely anticipated by market constituents given the loan’s debt service coverage ratio (DSCR) of 1.06 based on net cash flow through the first nine months of 2021 coupled with sub-optimal collateral occupancy of 80%.

With the exception of multifamily, special servicing rates declined compared to the prior month across all major property types. Multifamily transfers to special servicing included two properties located in the Permian Basin region of southwest Texas — Aviare Place and University Gardens. The multifamily special servicing rate was 2.55%, which increased compared to 2.49% last month. The lodging sector had the highest special servicing rate (13.19%), which was following by retail (11.47%) and office (3.31%). Although the office special servicing rate tracked lower compared to last month (3.46%), the percentage of office loans in special servicing is still higher than special servicing rates from 6 months and 12 months prior.

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 overall 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 lodging, retail, office, and self storage declined while multifamily and industrial exhibited modest increases in overall distress. Two of the largest loans to transfer to special servicing this month were secured by office properties — the $46.7 million Princeton South Corporate Center loan, secured by 267,426-sf office property in Ewing, NJ, and the $36.6 million 55 Green Street loan, secured by a 54,414-sf office building located in San Francisco’s Financial District. For additional information about these 2 loans, click View Details below:

	[View Details]	[View Details]
Loan	Princeton South Corporate Center	55 Green Street
Balance	$46,709,131	$36,600,000
Special Servicer Transfer Date	2/7/2022	1/28/222

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Mixed Use Collateral in CMBS Conduits

CRED iQ

February 24, 2022

Loans secured by mixed-use properties accounted for approximately 8% of total conduit issuance in 2021 after nearly reaching 10% in 2020. The mixed-use property type, along with office, helped to offset the decline in securitization volume of hotel and retail properties in 2020 and 2021 vintage CMBS. Although retail collateral accounted for approximately 19% of conduit issuance in 2021, lodging collateral only accounted for about 4%, which was comparatively lower compared to vintage trends from prior years.

Property Type Concentration % - 2021 CMBS Conduit Issuance

The inclusion of mixed-use collateral in CMBS transactions has exhibited a steady, although somewhat erratic, increase in frequency of loans and amount of outstanding debt since 2010. CMBS conduit transactions with a vintage year of 2017 have the highest amount of outstanding debt secured by mixed-use properties with over $4 billion. After a peak in volume in 2017, mixed-use collateral in CMBS conduits declined over 50% in 2018 before rebounding to over $3.7 billion in 2019. There was reduced volume in conduit transactions in 2020 and 2021, compared to 2019, but the concentration of mixed-use properties within collateral pools remained in line with elevated levels over the past 10 years, totaling approximately 9% in 2020 and 8% in 2021.

Explore Mixed Use Properties

A property can be classified as mixed-use when revenue from an alternative-use component of the property accounts for a specified percentage of total revenue. The most common type of mixed-use collateral is an office building with a ground floor retail component. With more than 1,700 mixed-use properties in CMBS conduit transactions that CRED iQ monitors, approximately 42% of the properties (47% by outstanding debt) have a retail/office combination of usage. Combinations of multifamily properties with retail components are the next most common property mix type, accounting for 15% of total mixed-use properties (7% by outstanding debt). Office and retail were the most frequent components present in mixed-use CMBS conduit properties.

On a more granular level, many properties are classified as mixed-use within the CMBS reporting package, even though the use type is singular. This is often the case for properties that are part of portfolios that secure a single mortgage. Although these loans are secured by mixed-use portfolios, the individual properties have a singular use. Inclusive of mixed-use portfolios, CRED iQ accounted for over 40 combinations of property uses for mixed-use mortgage collateral. Other types of single use properties that may be categorized as mixed-use include event-driven facilities such as design centers, showrooms, galleries, or other types of event spaces. Even a variety of social clubs have appeared as mixed-use collateral for CMBS loans, although those types of properties have characteristics most in common with retail.

CMBS Subtype Frequency % for Mixed Use Properties

Often times, the physical layout of a building or property with a mixed-use designation belies the true nature of underlying operations. For example, the $2.3 billion GM Building loan is secured by a 2 million-sf 50-story office tower with an iconic retail component at its base — the flagship Apple Store, designer brands DIOR and Balenciaga, and a flagship store for Under Amour (or FAO Schwarz for the nostalgic) are highlights of the GM Building’s retail offerings. Although the retail component of the GM Building is only about 9% of the building’s total NRA, retail tenants accounted for approximately 26% of base rents at loan origination.

The largest mixed-use property by property size and number of uses is McClellan Business Park in Sacramento, CA, which secures a $358 million mortgage. With nearly 7 million square feet, the business park primarily comprises industrial (82% of NRA) and office (15% of NRA), but also features residential and retail buildings as well as airfield hangars.

As different property types fall out of favor or gain popularity from a lending perspective, mixed-use collateral may have an advantage of providing diversification of cash flow from multiple property sectors. Additionally, the physical structure of a mixed-use property may be more amenable to repositioning if one particular use case becomes impaired. Relatively newer mixed-use combinations include life science components, which have distinctive buildouts with attributes of office, lab, and manufacturing characteristics. Nearly all mixed-use properties with a life science component were in a 2019 or later vintage conduit deal. Considering the value-add nature of commercial real estate, properties can evolve to their highest and best use over time, which may require generating cash flow from multiple types of mixed-use combinations. When evaluating mixed-use property types, it is important to ask ‘What’s in your collateral?’

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