Delinquent Ginnie Mae Loans

February 22, 2022

This week, CRED iQ calculated real-time valuations for 3 multifamily properties that secure delinquent GNMA loans. Although GNMA loans have mortgage insurance from the FHA as well as a timely payment guarantee, delinquent Ginnie Mae loans can still lead to foreclosure that can provide opportunities for distressed investors looking to step in and inject additional capital or create value-add plans by improving operations. Mortgage originators, distressed investors, and commercial brokers search CRED iQ’s database of approximately 15,000 Ginnie Mae loans totaling more than $138 billion in outstanding debt for their next deal. The properties featured in this week’s WAR Report secure a subset of select Ginnie Mae loans that are at least 30 days delinquent, including 2 properties in the Washington, DC MSA.

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 and GNMA loan reporting, including detailed financials and borrower contact information, sign up for a free trial here.

Glenmont Metrocenter Apartments

254 units, Multifamily, Silver Spring, MD [View Details]

GNMA 2019-G617GYZT6

This $56.1 million loan, which is over 30 days delinquent, is secured by a 4-story, 254-unit multifamily property in Silver Spring, MD, located within walking distance to the Glenmont Station for the Washington Metropolitan Area Transit Authority (WMATA). The mortgage backs Ginnie Mae construction loan certifications (CLCs) and was originated by AGM Financial Services in February 2019. There were 28 funding draws with the latest one occurring in November 2021. The FHA-insured mortgage was issued through the Department of Housing and Urban Development’s (HUD) 221(d)(4) program to facilitate the construction of multifamily properties for moderate-income families. The loan has an interest rate of 4.62%, a 40-year term, and a prepayment premium for the first 10 years of the loan term. The collateral property was renamed as the Atelier Apartments and is part of a 30-acre redevelopment project that also features newly constructed residential townhomes. The property, which opened in 2021, was developed by Buchanan Partners and Elion Partners. Despite the reported delinquency, the property compares favorably to rental stock in the immediate vicinity of Glenmont Station and has superior amenities that should allow the apartments to command rents in line or relatively higher than the market. For the full valuation report and loan-level details, click here.

*Picture of property not available due to new construction.

Property Name	Atelier Apartments
Address	^{2511 Glenallan Ave Silver Spring, MD 20906}
Outstanding Balance	$56,053,067
Interest Rate	4.62%
Origination Date	2/14/2019
Maturity Date	6/1/2061

Eden By The Rouge

180 units, Assisted Living, Canton, MI [View Details]

GNMA 2019-3617J4UY3

This $16.3 million loan, which is over 6 months delinquent, is secured by a 180-unit senior housing facility in Canton, MI, located approximately 25 miles west of Detroit, MI. Similar to the Glenmont Metrocenter Apartments, this mortgage represents construction financing that back CLCs. However, this loan was issued through HUD’s 232 program, which facilitates the construction of assisted living facilities. Love Funding originated the loan in April 2019 with an original balance of just under $1 million. Since origination, there have been 19 funding draws with the latest occurring in June 2021. The loan has an interest rate of 4.53% and a maturity date in December 2060. The property was renamed Kingsley Senior Living after completion and provides memory care services as well as assisted living facilities. The facility opened in mid-2021, although the status and velocity of resident enrollment was not disclosed. For the full valuation report and loan-level details, click here.

Property Name	Kingsley Senior Living
Address	^{44100 Connection Way Canton, MI 48188}
Outstanding Balance	$16,304,017
Interest Rate	4.53%
Origination Date	4/1/2019
Maturity Date	12/1/2060

Parkway Apartments

159 units, Affordable Housing, Temple Hills, MD [View Details]

GNMA 2013-36181GW54

This $8.1 million loan is over 6 months delinquent and is secured by a 3-story, 159-unit affordable housing multifamily property in Temple Hills, MD, located approximately 9 miles outside of Washington, DC. The mortgage backs Ginnie Mae permanent loan certificates (PLCs) and was originated by Wells Fargo Multifamily Capital in September 2013. The loan falls under both Section 221 (d)(4) and Section 223 (a)(7) of FHA’s mortgage insurance program for the rehabilitation and refinancing, respectively, of affordable housing properties. The loan carries an interest rate of 3.85% and has a maturity date in October 2050. A prepayment penalty of 10% is required during the first 5 years of the loan term and then is reduced to 5% before it declines annually by 1%. The loan is eligible for prepayment without penalty on November 1, 2023. The property operates with a Low-Income Housing Tax Credit (LIHTC) and approximately 90% of the units are set aside with rent ceilings lower than 60% of Area Median Income (AMI). The LIHTC was issued in 2003, which is more than 15 years ago, so the property may be out of its initial compliance period. For the full valuation report and loan-level details, click here.

Property Name	Parkway Apartments
Address	^{4425 23rd Parkway Temple Hills, MD 20748}
Outstanding Balance	$8,092,547
Interest Rate	3.85%
Origination Date	9/1/2013
Maturity Date	10/1/2050

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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 Agency loan and property data.

Office and Mixed Use Lease Expirations in CMBS

CRED iQ

February 16, 2022

Office collateral has been one of the more heavily scrutinized property types in CMBS over the past year given the ever-evolving dynamics of remote work and businesses’ evaluations of the need for physical space. The adverse impacts from the pandemic on lodging and retail were severe and immediate but both sectors recovered substantially over the past 18 months. Conversely, the office sector has been relatively less impacted, and distress has been concentrated to specific sets of factors such as location, class, vintage, or some combination thereof.

CRED iQ’s Distressed Rate for Office CMBS collateral stood at 3.67% as of January 2022 and has increased for 3 consecutive months. The Distressed Rates for Retail and Lodging properties have exhibited a clear downward trend in 2021. That variance in distress among property types can, in part, be attributed to the length of leases for each property type sector. Lodging properties have nightly or weekly rentals and in-line tenants for retail properties generally have lease terms ranging from 2 to 5 years. Lease terms for office properties are typically longer than retail properties and can be 10 years or more in length. Of course, with the uncertainty that a pandemic brings, there has been evidence of pressure for shorter lease terms across retail and office.

There is generally a longer amount of time required for an office property’s tenant roster to rollover compared to other property types. Examining lease rollover trends is one of many tools we have to identify when and where the next pocket of office distress may materialize. CRED iQ examined over 23,000 major leases in CMBS office and mixed-use collateral properties. For this exercise, all leases that were among the 5 largest by percentage of net rentable area (NRA) for a particular building qualified as a major lease.

Initial high-level observations included nearly 60 million square feet of office space in CMBS that were set to expire in 2022. The amount of square feet expiring per year ramps up to over 65 million in 2024 and to a peak of almost 74 million square feet in 2024. Lease expirations subsequently taper off in 2025 and 2026 before spiking up in 2027 to approximately 73 million square feet. There are some caveats to these figures — underlying data by its nature is historical, imperfect, and may not reflect the most recent extensions that tenants may have executed. A pertinent example is one of the biggest leases within the subset that is scheduled to expire in 2022 — JP Morgan’s 780,000 square foot lease at 245 Park Avenue in Manhattan, NY. The lease is scheduled to expire in October 2022 but most of the space will not be hitting the market anytime soon because JP Morgan had been subletting to Société Générale. At lease expiration, a direct lease with take effect with the subtenant for a 10-year term with 2, 5-year extension options.

Lease expirations can have several possible outcomes for office landlords. From a positive perspective, a renewal or new direct lease may allow rents to rest higher if market conditions are favorable. However, high vacancies and downward pressures on rental rates may lead to reductions in cash flow and subsequent distressed scenarios.

Taking a closer look at lease rollover in 2022, CRED iQ also examined major lease expirations based on geographic concentration. The New York-Northern New-Long Island MSA had the highest number of expiring leases and the most amount of square footage expiring in 2022 with over 300 expiring leases totaling more than 10 million square feet. The Philadelphia MSA had the second highest amount of rollover in 2022 with approximately 4.5 million square feet set to expire in 2022. Minneapolis followed close behind with approximately 3.5 million square feet scheduled to expire in 2022. Other regions that were included in the Top 10 MSAs with Major Lease Expirations included Houston, Dallas, Los Angeles, Chicago, San Francisco, Detroit, and Seattle.

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REO Multifamily Properties

CRED iQ

February 15, 2022

This week, CRED iQ calculated real-time valuations for 5 multifamily properties that are REO. REO properties are of particular interest to distressed investors looking for value-add opportunities. After title is taken by a lender, these properties are typically sold within a short time frame or after a period of stabilization. Due to the nature of distress surrounding most REO properties, the assets can often be acquired at a discount relative to stabilized comps. Featured REO assets include a student housing property in Pennsylvania, a senior housing facility in South Carolina, and two garden-style apartment complexes in Texas. To explore a complete list of all multifamily properties in CRED iQ’s platform, click on the link below!

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CRED iQ valuations factor in base-case (Most Likely), downside (significant loss of tenants), and dark scenarios (100% vacant). Select valuations are provided for the properties 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.

University Gate Apartments

485 beds, Student Housing, Erie, PA [View Details]

This property, which has outstanding debt of $18.9 million, has been with the special servicer since July 2019. Title transferred to Torchlight Loan Services, acting as special servicer, in October 2020 via foreclosure. The special servicer sold the property, on behalf of a CMBS securitization, through an auction on ten-x.com in early-December 2021. The property is under contract to sell with an expected price of $13.5 million, equal to $27,753 per bed. The sale was expected to close in February. The sales price provides an updated reference for pricing discovery on distressed student housing properties in the region such as The Depot, which caters to the University of Akron, and Pratt Studios, which caters to the Indiana University of Pennsylvania.

University Gate Apartments primarily serves students attending Penn State Behrend, a satellite campus for Pennsylvania State University located in Erie, PA. The student housing facility initially exhibited occupancy declines in 2018 after Penn State Behrend opened a new on-campus residence building named Trippe Hall. Students’ preference for the new on-campus residence hall led to cash flow issues at University Gate Apartments, which culminated in the property’s receivership and transition to REO. For the full valuation report and loan-level details, click here.

University Gate Apartments - JPMCC 2014-C20

Property Name	University Gate Apartments
Address	^{5086 Station Road Erie, PA 16510}
Outstanding Balance	$18,856,858
Interest Rate	4.65%
REO Title Date	10/20/2020
Most Recent Appraisal	$26,900,000 ($55,464/bed)
Most Recent Appraisal Date	3/31/2014

Boston Creek Apartments

349 units, Garden-Style, Lubbock, TX [View Details]

This property, which has outstanding debt of $15.7 million, has been with the special servicer since May 2019. Less than 5 months after its transfer, CWCapital, as special servicer, was able to take title of the property through foreclosure. The property appears to be near the end of a repositioning effort following renovations and upgrades throughout the complex’s units. The renovations have allowed leasing activity at the property to improve and has increased the rental rates at units that have turned over. The apartments were significantly inferior to competing multifamily properties in the Lubbock MSA. Renters’ preferences for newer, higher quality housing options with more amenities was a primary factor that caused occupancy declines at Boston Creek Apartments in 2018 and 2019. Prospective buyers can expect the property to be marketed for sale following a period of stabilization after the completion of renovations. For the full valuation report and loan-level details, click here.

Property Name	Boston Creek Apartments
Address	^{2701 44th Street Lubbock, TX 79413}
Outstanding Balance	$15,673,196
Interest Rate	4.98%
REO Title Date	10/1/2019
Most Recent Appraisal	$13,610,000 ($38,997/unit)
Most Recent Appraisal Date	12/19/2019

Harbison Shores

63 units, Assisted Living, Irmo, SC [View Details]

This assisted living and memory care facility, which has an outstanding balance of $8 million, has been with the special servicer since September 2019. In fact, Harbison Shores (fka Agape at Harbison) is the only REO property across all of Freddie Mac’s K-Deals securitizations. The property transferred to CWCapital for special servicing after operational issues and resident attrition caused cash flows to decline. The foreclosure of the property was briefly delayed in early-2020 due to the pandemic, but the facility became REO in June 2020. The pandemic has been a barrier in the property’s path toward stabilization; however, occupancy has recovered to about 91% as of November 2021. The facility has 83 total beds, across 63 units, and most occupants are private-pay residents (approximately 94% of total revenue) with only a handful of Medicaid residents (approximately 4% of total revenue). The properly likely needs additional time for stabilization before it can be sold, which may occur by the end of 2022. For the full valuation report and loan-level details, click here.

Property Name	Harbison Shores
Address	^{990 Columbia Avenue Irmo, SC 29306}
Outstanding Balance	$8,042,698
Interest Rate	5.47%
REO Title Date	6/8/2020
Most Recent Appraisal	$6,130,000 ($97,302/unit)
Most Recent Appraisal Date	6/14/2021
CRED iQ Base-Case Value	$6,533,000 ($103,705/unit)

Verve Apartments

56 units, Garden-Style, Baytown, TX [View Details]

This apartment complex, which has an outstanding balance of $3.4 million, has been with the special servicer since October 2020. The loan transferred to KeyBank, acting as special servicer, after the former owner requested an extension related to a forbearance agreement that was granted in May 2020. A forbearance extension did not come to fruition and the former owner attempted to sell the property. A subsequent purchase offer was not sufficient to pay off the outstanding balance plus additional exposure for the mortgage. Without a satisfactory sale, the special servicer pursued foreclosure and the property became REO in July 2021. The property was auctioned in September 2021 but failed to trade. CRED iQ observed a high bid between $63,000 and $66,000 per unit, which failed to meet a pre-determined reserve price. AL thought, the property failed to sell at auction, it will likely be auctioned again in the near term after additional stabilization, which includes management of tenant rollover and improvement of rent collections. Tenant management is an issue that can be traced back to the previous owner and the property’s initial operational struggles that led to it becoming REO. For the full valuation report and loan-level details, click here.

Property Name	Verve Apartments
Address	^{3201 Garth Road Baytown, TX 77521}
Outstanding Balance	$3,447,418
Interest Rate	4.90%
REO Title Date	7/6/2021
Most Recent Appraisal	$4,800,000 ($85,714/unit)
Most Recent Appraisal Date	5/30/2019

2817 Palisade Avenue

13 units, Mid Rise, Union City, NJ [View Details]

This mid-rise apartment building, which has an outstanding balance of $1.5 million, has been with the special servicer since August 2019. The property’s distress was related to poor property management, which eventually became non-existent after the borrower faced legal troubles. Additionally, the property had issues with insufficient insurance coverage and unauthorized liens. The property became REO in July 2021. The next step is for the property to be sold. Based on the size of the property, it may be sold individually or as a package with other similar or distressed properties in the local market. For the full valuation report and loan-level details, click here.

Property Name	2817 Palisade Avenue
Address	^{2817 Palisade Avenue Union City, NJ 07087}
Outstanding Balance	$1,527,356
Interest Rate	4.39%
REO Title Date	7/19/2021
Most Recent Appraisal	$950,000 ($73,077/unit)
Most Recent Appraisal Date	8/17/2020

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Lease Expirations

CRED iQ

February 8, 2022

This week, CRED iQ calculated real-time valuations for 5 properties that have major tenants with lease expirations in the next 6 months. Featured leases include central business district (CBD) office space in Manhattan, Baltimore, Los Angeles, and Indianapolis as well as suburban office space in the Detroit MSA. Lease expirations are opportunities for tenant reps to source options and find solutions for clients. Additionally, lease expirations can serve as a preemptive signal of distress for CRE loans if prospects for leasing the newly vacant space are low.

The CRED iQ valuations factor in a base-case (Most Likely), a downside (significant loss of tenants), and dark scenarios (100% vacant). Select valuations are provided for the properties below. For full access to the valuation reports including all 3 valuation scenarios as well as full CMBS loan reporting, with detailed financials, updated tenant information, and borrower contact information, sign up for a free trial here.

Bank of America Plaza

438,996 sf, Suburban Office, Troy, MI [View Details]

Bank of America has a 144,701-sf lease scheduled to expire on July 31, 2022 at an office property located in Troy, MI, approximately 18 miles outside of Detroit. The office building secures a $45.3 million mortgage that is scheduled to mature in September 2024. The impending lease expiration has implications for the upcoming loan maturity. Bank of America’s space accounts for 33% of the property’s NRA and the tenant has 3, 5-year extension options available at lease expiration. However, servicer commentary for the loan indicates the tenant is in negotiations with the borrower regarding extension terms. Additional negotiations may portend a reduced footprint for the tenant if Bank of America no longer has a need for the total space under contract or a lower rental rent if rent steps outlined in the original terms of the 5-year option outpaced market rent for Troy, MI. Considerations for a positive outcome prior to lease expiration include Bank of America’s financial commitment to the building — over $7 million in capital investments — as well as the relative superior class of the property, which was LEED-certified Silver in 2015. For the full valuation report and loan-level details, click here.

Property Name	Bank of America Plaza
Address	^{2600 West Big Beaver Road Troy, MI 48084}
Loan Balance	$45,322,217
Interest Rate	4.06%
Maturity Date	9/6/2024
Most Recent Appraisal	$79,200,000 ($180/sf)
Most Recent Appraisal Date	7/17/2017
CRED iQ Base-Case Value	$69,170,000 ($158/sf)

Ditson Building

58,850 sf, CBD Office, New York, NY [View Details]

TTC USA Consulting has a 27,750-sf lease scheduled to expire on June 30, 2022 at a 10-story office building in the Midtown South submarket of Manhattan, NY. TTC USA Consulting uses the space as a showroom for Turkish Trade Centers. The tenant previously occupied 33,300 sf at the property pursuant to a lease that expired on December 1, 2021. TTC USA Consulting subsequently reduced its footprint by 5,550 sf and signed a short-term lease extension through June 30, 2022. The short-term extension may foreshadow the possibility of TTC USA Consulting’s intention to vacate, especially considering the tenant’s lease had a 5-year extension option available at the previous December 2021 expiration date. Furthermore, the tenant only physically uses the space for showroom events, which have been infrequent throughout the pandemic. Following its downsizing at the building, TTC USA Consulting now accounts for 47% of the property’s NRA. CRED iQ estimates occupancy could decline to 43% should TTC USA Consulting vacate at lease expiration. For the full valuation report and loan-level details, click here.

Property Name	Ditson Building
Address	^{8-10 East 34th Street New York, NY 10016}
Loan Balance	$37,500,000
Interest Rate	5.43%
Maturity Date	8/1/2028
Most Recent Appraisal	$62,000,000 ($1,054/sf)
Most Recent Appraisal Date	4/20/2018
CRED iQ Downside Value	$31,770,000 ($540/sf)

650 South Exeter Street

206,355 sf, CBD Office, Baltimore, MD [View Details]

Laureate Education is vacating 103,335 sf of space at an office condominium in the Harbor East submarket of Baltimore, MD at its lease expiration on June 30, 2022. The office condominium is part of a mixed-use property that includes part of a parking garage and a movie theater. Altogether, the property secures a $25 million mortgage. Laureate Education’s lease was originally scheduled to expire in June 2027, but the for-profit education operator terminated its lease in March 2021. The lease termination required 15 months’ notice, which effectively adjusted the lease expiration to June 2022. Laureate Education leases approximately half of the office condo and its departure will leave the property approximately 33% occupied.

Aside from the 103,335 sf of space that will need to be marketed as available for lease, there is a possibility that additional space in the building will soon hit the market. The property’s second largest tenant, Morgan Stanley Financial Advisors, also has a lease that is set to expire in 2022. Morgan Stanley’s lease accounts for 19% of the office condo’s NRA but the tenant has 2, 5-year extension options. Baltimore has had its fair share of struggles with office vacancy — CRED iQ’s January 10, 2021 WAR Report discusses office tenants’ location preferences for the Harbor Point submarket over the Inner Harbor/CBD submarkets. Positive attributes for the soon-to-be vacant office space are its close proximity to Harbor Point and relatively newer build compared to similar office properties in the market. For the full valuation report and loan-level details, click here.

Property Name	650 South Exeter Street
Address	^{650 South Exeter Street Baltimore, MD 21202}
Loan Balance	$25,000,000
Interest Rate	4.84%
Maturity Date	6/6/2028
Most Recent Appraisal	$79,400,00 ($385/sf)
Most Recent Appraisal Date	11/17/2017
CRED iQ Downside Value	$26,000,000 ($126/sf)

1950 Sawtelle Boulevard

106,875 sf, Office, Los Angeles, CA [View Details]

Two tenants have upcoming lease expirations in April and May at an office building in West Los Angeles. Lot 5 Media has a 45,158-sf lease, accounting for 42% of NRA, that is scheduled to expire on May 31, 2022. Lot 5 Media uses the space for post-production media services including turn-key offices outfitted with various media and production amenities. Kung Fu Factory, a video game developer, has a 14,882-sf lease, accounting for 14% of the GLA, that expires on April 30, 2022. Both tenants have been in occupancy for more than 5 years. Furthermore, Lot 5 Media has signage on the building and appears to have invested heavily in customizing its space for client offerings. The office building secures a $35.5 million mortgage that matures in January 2026. The property is fairly unique within its neighborhood, which comprises primarily residential housing. Should either Lot 5 Media or Kung Fu Factory vacate, prospective medical office tenants may find amenities at the property appealing. Several smaller suites at the property are used as medical offices and the building has a parking garage for efficient ingress and egress. For the full valuation report and loan-level details, click here.

1950 Sawtelle Boulevard - MSBAM 2016-C30 | JPMCC 2016-JP3 | CGCMT 2016-P5

Property Name	1950 Sawtelle Boulevard
Address	^{1950 Sawtelle Boulevard Los Angeles, CA 90025}
Loan Balance	$35,509,740
Interest Rate	5.07%
Maturity Date	1/6/2026
Most Recent Appraisal	$54,300,000 ($508/sf)
Most Recent Appraisal Date	8/19/2016
CRED iQ Base-Case Value	$44,880,000 ($420/sf)

117 East Washington

48,702 sf, Mixed Use (Office/Retail), Indianapolis, IN [View Details]

Hensley Legal Group, a local law firm, has a 15,882-sf lease that is scheduled to expire on March 31, 2022 at an office building in CBD Indianapolis. The lease accounts for 33% of the building’s NRA. Hensley Legal Group is one of 3 tenants at the property, which secures a $6.2 million mortgage. The largest tenant, which accounts for 40% of the property’s NRA, is an affiliate of the loan sponsor and the smallest tenant, Fogo de Chão, operates a restaurant on the ground floor of the building. Servicer commentary for the loan has not yet confirmed if Henley Legal Group plans to renew or vacate. Should the tenant vacate, the sponsor-affiliated tenant may be a candidate expand into some of the vacant space. Otherwise, occupancy at the property may decline to 77%. For the full valuation report and loan-level details, click here.

Property Name	117 East Washington
Address	^{117 East Washington Street Indianapolis, IN 46204}
Loan Balance	$6,151,375
Interest Rate	4.74%
Maturity Date	9/6/2027
Most Recent Appraisal	$10,300,000 ($211/sf)
Most Recent Appraisal Date	7/6/2017
CRED iQ Base-Case Value	$7,154,000 ($147)

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Market Delinquency Tracker – February 2022

CRED iQ

February 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.

The hotel sector continued to exhibit the highest volatility by property type across several markets. By market-sector, hotel accounted for four of the Top 10 increases in distress and five of the Top 10 decreases in distress. Financial pressures for many lodging properties have been alleviated over the trailing 12 months, albeit maybe temporarily, through the use of forbearance agreements, or modifications in more severe cases of cash flow disruptions. As forbearance agreements expire, get extended, or new forbearance agreements are signed, rates of distress can fluctuate rather dramatically on a market-by-market basis. As an example, the distressed rate for the Nashville hotel market spiked this month following the delinquency of a $104.8 million loan secured by the 456-key Westin Nashville. A forbearance agreement was signed in October 2020 that deferred debt service payments through April 2021; the loan subsequently remained current through January 2022 until it became 30 days delinquent.

* Update on February 28, 2022: The servicer for the Westin Nashville loan posted debt service payments for December 2021 through February 2022. This adjustment would have made the Westin Nashville current in payment for the January 2022 reporting period. Based on the servicing reporting error, the loan secured by the Westin Nashville has been current in payment throughout its term.

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.

Similar to last month, the office sector showed additional signs of distress in select markets. Three of the Top 10 market-sectors with increased distress were represented by the office property type. The Allentown office market had the highest overall percentage increase, among the Top 50 MSAs, in its distressed rate compared to the prior month. This was primarily caused by the special servicing transfer of a $59.4 million loan secured by TEK Park — a 514,033-sf, 8-building office campus located in suburban Lehigh Valley, PA. The Allentown market was ranked as one of the best overall markets, within the Top 50 MSAs, as recently as last month due to strong performance in the industrial sector.

The distressed rate for the Phoenix market improved this month after the $165.0 million Scottsdale Quarter loan returned to the master servicer as a corrected mortgage. Scottsdale Quarter is a 541,971-sf mixed-use development comprising open-air retail storefronts and office space. As a result, the Phoenix mixed-use sector had the greatest month-over-month decline among all rates of distress.

The Minneapolis MSA has the highest overall distressed rate at 23.1%, which was unchanged from the prior month. Louisville (21.1%), New Orleans (14.8%), Cleveland (12.2%), and Milwaukee (10.7%) comprise the remaining markets with the highest rates of distress. The Raleigh market (0.3%) became the market with the lowest percentage of distress among the Top 50 MSAs this month following delinquency cures in the retail and office sectors.

For the full CRED DQ Report, download here:

The-CRED-DQ-Market-Delinquency-Report-2022-02-1 Download

MSA – Property Type	DQ/SS (millions)	DS/SS (%)	Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA	$95.6	2.9%	1.8%
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	$59.4	20.9%	20.9%
Allentown – Other	$0.0	0.0%	0.0%
Allentown – Retail	$36.2	9.7%	0.0%
Allentown – Self Storage	$0.0	0.0%	0.0%
Atlanta – Atlanta-Sandy Springs-Marietta, GA MSA	$779.9	3.0%	0.0%
Atlanta – Hotel	$208.8	11.2%	-1.9%
Atlanta – Industrial	$18.0	1.9%	1.9%
Atlanta – Multifamily	$04.0	0.0%	0.0%
Atlanta – Office	$07.6	0.2%	0.0%
Atlanta – Other	$0.0	0.0%	0.0%
Atlanta – Retail	$541.5	20.5%	0.0%
Atlanta – Self Storage	$0.0	0.0%	0.0%
Austin – Austin-Round Rock, TX MSA	$183.7	2.1%	0.1%
Austin – Hotel	$59.0	6.9%	1.1%
Austin – Industrial	$0.0	0.0%	0.0%
Austin – Multifamily	$36.0	0.6%	0.0%
Austin – Office	$0.0	0.0%	0.0%
Austin – Other	$0.0	0.0%	0.0%
Austin – Retail	$86.0	11.5%	-0.2%
Austin – Self Storage	$02.6	2.9%	0.2%
Baltimore – Baltimore-Towson, MD MSA	$408.4	4.2%	-0.1%
Baltimore – Hotel	$111.9	25.3%	0.0%
Baltimore – Industrial	$0.0	0.0%	0.0%
Baltimore – Multifamily	$06.1	0.1%	0.0%
Baltimore – Office	$22.8	3.9%	-0.1%
Baltimore – Other	$11.8	3.2%	0.0%
Baltimore – Retail	$255.8	23.7%	0.3%
Baltimore – Self Storage	$0.0	0.0%	0.0%
Birmingham – Birmingham-Hoover, AL MSA	$63.4	2.7%	0.2%
Birmingham – Hotel	$40.6	38.5%	0.0%
Birmingham – Industrial	$0.0	0.0%	0.0%
Birmingham – Multifamily	$0.0	0.0%	-0.1%
Birmingham – Office	$0.0	0.0%	0.0%
Birmingham – Other	$0.0	0.0%	0.0%
Birmingham – Retail	$22.8	3.2%	0.0%
Birmingham – Self Storage	$0.0	0.0%	0.0%
Boston – Boston-Cambridge-Quincy, MA-NH MSA	$174.6	1.0%	-0.3%
Boston – Hotel	$46.7	6.6%	-8.0%
Boston – Industrial	$0.0	0.0%	0.0%
Boston – Multifamily	$12.3	0.2%	0.2%
Boston – Office	$0.0	0.0%	0.0%
Boston – Other	$0.0	0.0%	0.0%
Boston – Retail	$115.7	6.3%	0.2%
Boston – Self Storage	$0.0	0.0%	0.0%
Bridgeport – Bridgeport-Stamford-Norwalk, CT MSA	$224.5	5.8%	0.2%
Bridgeport – Hotel	$63.1	51.2%	-0.3%
Bridgeport – Industrial	$17.8	14.1%	0.4%
Bridgeport – Multifamily	$03.4	0.2%	0.1%
Bridgeport – Office	$108.5	10.0%	1.3%
Bridgeport – Other	$09.8	2.4%	0.0%
Bridgeport – Retail	$21.7	7.2%	0.0%
Bridgeport – Self Storage	$0.0	0.0%	0.0%
Charlotte – Charlotte-Gastonia-Concord, NC-SC MSA	$291.7	3.7%	0.9%
Charlotte – Hotel	$87.8	7.4%	-1.0%
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	25.4%	0.2%
Charlotte – Retail	$96.9	8.2%	6.7%
Charlotte – Self Storage	$0.0	0.0%	0.0%
Chicago – Chicago-Naperville-Joliet, IL-IN-WI MSA	$2,410.6	9.3%	-0.6%
Chicago – Hotel	$1,013.7	48.0%	-0.8%
Chicago – Industrial	$03.8	0.2%	0.0%
Chicago – Multifamily	$118.9	1.3%	0.0%
Chicago – Office	$767.3	10.7%	-1.6%
Chicago – Other	$239.6	12.7%	0.4%
Chicago – Retail	$267.4	8.2%	-0.8%
Chicago – Self Storage	$0.0	0.0%	0.0%
Cincinnati – Cincinnati-Middletown, OH-KY-IN MSA	$295.6	7.9%	0.2%
Cincinnati – Hotel	$126.6	42.3%	0.0%
Cincinnati – Industrial	$0.0	0.0%	0.0%
Cincinnati – Multifamily	$0.6	0.0%	0.0%
Cincinnati – Office	$16.4	3.3%	0.9%
Cincinnati – Other	$15.6	5.3%	0.0%
Cincinnati – Retail	$135.3	22.4%	0.9%
Cincinnati – Self Storage	$01.0	1.9%	0.2%
Cleveland – Cleveland-Elyria-Mentor, OH MSA	$477.0	12.2%	0.5%
Cleveland – Hotel	$97.7	52.1%	6.5%
Cleveland – Industrial	$0.0	0.0%	0.0%
Cleveland – Multifamily	$08.8	0.6%	-0.5%
Cleveland – Office	$104.4	13.1%	0.2%
Cleveland – Other	$176.6	42.9%	0.3%
Cleveland – Retail	$89.4	12.8%	0.7%
Cleveland – Self Storage	$0.0	0.0%	0.0%
Columbus, OH – Columbus, OH MSA	$242.6	4.1%	0.0%
Columbus, OH – Hotel	$83.7	26.7%	0.2%
Columbus, OH – Industrial	$11.9	3.4%	0.0%
Columbus, OH – Multifamily	$02.0	0.1%	0.1%
Columbus, OH – Office	$12.4	2.3%	-0.8%
Columbus, OH – Other	$0.0	0.0%	0.0%
Columbus, OH – Retail	$121.6	15.1%	0.1%
Columbus, OH – Self Storage	$11.0	19.0%	-0.2%
Dallas – Dallas-Fort Worth-Arlington, TX MSA	$632.8	1.9%	-0.2%
Dallas – Hotel	$235.5	6.7%	-1.5%
Dallas – Industrial	$01.7	0.1%	0.0%
Dallas – Multifamily	$46.9	0.2%	0.0%
Dallas – Office	$152.5	4.1%	0.0%
Dallas – Other	$23.6	1.1%	0.0%
Dallas – Retail	$160.6	6.9%	0.2%
Dallas – Self Storage	$11.9	3.5%	0.8%
Denver – Denver-Aurora, CO MSA	$353.6	2.1%	0.3%
Denver – Hotel	$36.0	4.2%	0.8%
Denver – Industrial	$0.0	0.0%	0.0%
Denver – Multifamily	$0.0	0.0%	0.0%
Denver – Office	$193.0	9.7%	-0.8%
Denver – Other	$66.5	7.1%	6.4%
Denver – Retail	$54.8	3.9%	-0.1%
Denver – Self Storage	$03.3	2.0%	0.1%
Detroit – Detroit-Warren-Livonia, MI MSA	$450.6	5.2%	0.8%
Detroit – Hotel	$214.0	31.1%	1.3%
Detroit – Industrial	$18.5	3.6%	-0.1%
Detroit – Multifamily	$27.7	0.8%	0.3%
Detroit – Office	$0.0	0.0%	0.0%
Detroit – Other	$22.2	3.7%	0.0%
Detroit – Retail	$168.2	10.5%	3.8%
Detroit – Self Storage	$0.0	0.0%	0.0%
Hartford – Hartford-West Hartford-East Hartford, CT MSA	$193.9	7.9%	-0.5%
Hartford – Hotel	$76.2	55.8%	-2.5%
Hartford – Industrial	$0.0	0.0%	0.0%
Hartford – Multifamily	$0.0	0.0%	0.0%
Hartford – Office	$87.6	22.3%	0.0%
Hartford – Other	$0.0	0.0%	-0.6%
Hartford – Retail	$30.2	13.0%	0.2%
Hartford – Self Storage	$0.0	0.0%	0.0%
Houston – Houston-Sugar Land-Baytown, TX MSA	$1,265.0	5.4%	-0.3%
Houston – Hotel	$632.3	52.6%	-0.3%
Houston – Industrial	$04.2	0.9%	0.1%
Houston – Multifamily	$37.5	0.3%	-0.5%
Houston – Office	$454.6	12.4%	0.4%
Houston – Other	$0.0	0.0%	0.0%
Houston – Retail	$106.5	2.8%	0.0%
Houston – Self Storage	$29.9	8.1%	-2.3%
Indianapolis – Indianapolis-Carmel, IN MSA	$303.1	6.1%	0.0%
Indianapolis – Hotel	$99.3	17.6%	-0.8%
Indianapolis – Industrial	$0.0	0.0%	0.0%
Indianapolis – Multifamily	$76.7	3.2%	0.0%
Indianapolis – Office	$75.4	12.8%	1.1%
Indianapolis – Other	$09.8	2.8%	-0.2%
Indianapolis – Retail	$37.9	7.4%	0.1%
Indianapolis – Self Storage	$04.0	5.4%	0.0%
Jacksonville – Jacksonville, FL MSA	$51.5	1.0%	0.1%
Jacksonville – Hotel	$38.5	9.3%	0.4%
Jacksonville – Industrial	$0.0	0.0%	0.0%
Jacksonville – Multifamily	$01.5	0.0%	0.0%
Jacksonville – Office	$0.0	0.0%	0.0%
Jacksonville – Other	$0.0	0.0%	0.0%
Jacksonville – Retail	$11.5	2.8%	0.7%
Jacksonville – Self Storage	$0.0	0.0%	0.0%
Kansas City – Kansas City, MO-KS MSA	$82.2	1.6%	-0.3%
Kansas City – Hotel	$28.5	11.9%	-2.0%
Kansas City – Industrial	$0.0	0.0%	0.0%
Kansas City – Multifamily	$12.3	0.5%	0.2%
Kansas City – Office	$0.0	0.0%	0.0%
Kansas City – Other	$02.8	1.2%	0.0%
Kansas City – Retail	$37.0	5.9%	-2.4%
Kansas City – Self Storage	$01.7	0.8%	0.0%
Las Vegas – Las Vegas-Paradise, NV MSA	$356.8	1.8%	-0.2%
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%	-0.1%
Las Vegas – Office	$27.8	4.4%	-0.8%
Las Vegas – Other	$0.0	0.0%	0.0%
Las Vegas – Retail	$307.9	6.5%	-0.5%
Las Vegas – Self Storage	$02.8	1.5%	0.1%
Los Angeles – Los Angeles-Long Beach-Santa Ana, CA MSA	$1,276.6	2.6%	-0.2%
Los Angeles – Hotel	$488.3	12.2%	-1.6%
Los Angeles – Industrial	$02.0	0.2%	0.0%
Los Angeles – Multifamily	$127.1	0.6%	0.0%
Los Angeles – Office	$68.6	0.6%	0.0%
Los Angeles – Other	$72.1	2.4%	-1.5%
Los Angeles – Retail	$518.5	8.1%	-0.1%
Los Angeles – Self Storage	$0.0	0.0%	0.0%
Louisville – Louisville/Jefferson County, KY-IN MSA	$624.5	21.1%	6.9%
Louisville – Hotel	$242.9	55.4%	51.4%
Louisville – Industrial	$0.0	0.0%	0.0%
Louisville – Multifamily	$04.3	0.4%	0.0%
Louisville – Office	$0.0	0.0%	0.0%
Louisville – Other	$0.0	0.0%	0.0%
Louisville – Retail	$377.4	59.0%	0.0%
Louisville – Self Storage	$0.0	0.0%	0.0%
Memphis – Memphis, TN-AR-MS MSA	$119.9	5.4%	-1.0%
Memphis – Hotel	$40.8	23.3%	0.8%
Memphis – Industrial	$0.0	0.0%	0.0%
Memphis – Multifamily	$17.8	1.7%	0.0%
Memphis – Office	$0.0	0.0%	0.0%
Memphis – Other	$18.4	24.4%	-11.7%
Memphis – Retail	$41.3	12.3%	-5.0%
Memphis – Self Storage	$01.7	1.2%	0.0%
Miami – Miami-Fort Lauderdale-Pompano Beach, FL MSA	$693.8	3.2%	0.5%
Miami – Hotel	$275.0	6.3%	0.2%
Miami – Industrial	$0.0	0.0%	0.0%
Miami – Multifamily	$14.1	0.2%	0.1%
Miami – Office	$07.6	0.4%	0.0%
Miami – Other	$08.6	0.5%	0.0%
Miami – Retail	$388.4	8.1%	2.2%
Miami – Self Storage	$0.0	0.0%	0.0%
Milwaukee – Milwaukee-Waukesha-West Allis, WI MSA	$246.5	10.7%	-0.3%
Milwaukee – Hotel	$35.5	23.1%	-3.2%
Milwaukee – Industrial	$0.0	0.0%	0.0%
Milwaukee – Multifamily	$0.0	0.0%	0.0%
Milwaukee – Office	$59.3	11.8%	0.8%
Milwaukee – Other	$0.0	0.0%	0.0%
Milwaukee – Retail	$151.8	31.1%	0.2%
Milwaukee – Self Storage	$0.0	0.0%	0.0%
Minneapolis – Minneapolis-St. Paul-Bloomington, MN-WI MSA	$1,906.2	23.1%	0.0%
Minneapolis – Hotel	$308.5	51.0%	0.0%
Minneapolis – Industrial	$0.0	0.0%	0.0%
Minneapolis – Multifamily	$0.0	0.0%	0.0%
Minneapolis – Office	$154.3	7.6%	-0.1%
Minneapolis – Other	$11.6	2.7%	-0.3%
Minneapolis – Retail	$1,431.8	75.1%	3.7%
Minneapolis – Self Storage	$0.0	0.0%	0.0%
Nashville – Nashville-Davidson-Murfreesboro-Franklin, TN MSA	$381.2	6.1%	1.9%
Nashville – Hotel	$240.0	18.4%	9.6%
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	$141.1	18.3%	0.0%
Nashville – Self Storage	$0.0	0.0%	0.0%
New Orleans – New Orleans-Metairie-Kenner, LA MSA	$491.7	14.8%	-0.5%
New Orleans – Hotel	$437.6	41.3%	-1.5%
New Orleans – Industrial	$0.0	0.0%	0.0%
New Orleans – Multifamily	$13.9	1.6%	-0.1%
New Orleans – Office	$17.3	3.6%	0.3%
New Orleans – Other	$0.3	0.2%	0.0%
New Orleans – Retail	$22.6	3.2%	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	$6,342.6	5.4%	-0.1%
New York City – Hotel	$1,535.0	41.6%	-1.5%
New York City – Industrial	$07.5	0.4%	0.0%
New York City – Multifamily	$471.5	1.4%	-0.1%
New York City – Office	$1,421.8	3.4%	0.2%
New York City – Other	$1,442.2	6.6%	-0.2%
New York City – Retail	$1,464.6	11.2%	0.0%
New York City – Self Storage	$0.0	0.0%	0.0%
Orlando – Orlando-Kissimmee, FL MSA	$188.9	1.8%	-0.5%
Orlando – Hotel	$88.5	3.2%	-2.5%
Orlando – Industrial	$0.0	0.0%	0.0%
Orlando – Multifamily	$01.9	0.0%	0.0%
Orlando – Office	$47.1	9.5%	0.0%
Orlando – Other	$0.0	0.0%	0.0%
Orlando – Retail	$51.5	6.1%	1.4%
Orlando – Self Storage	$0.0	0.0%	0.0%
Philadelphia – Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA	$813.3	4.5%	-0.3%
Philadelphia – Hotel	$303.3	34.0%	-4.7%
Philadelphia – Industrial	$0.0	0.0%	0.0%
Philadelphia – Multifamily	$105.3	1.2%	-0.1%
Philadelphia – Office	$132.4	3.3%	-0.1%
Philadelphia – Other	$47.7	3.6%	0.0%
Philadelphia – Retail	$224.5	9.3%	-0.2%
Philadelphia – Self Storage	$0.0	0.0%	0.0%
Phoenix – Phoenix-Mesa-Scottsdale, AZ MSA	$251.6	1.4%	-0.9%
Phoenix – Hotel	$38.9	2.4%	0.1%
Phoenix – Industrial	$10.1	2.1%	0.0%
Phoenix – Multifamily	$0.0	0.0%	0.0%
Phoenix – Office	$23.7	1.1%	0.0%
Phoenix – Other	$15.5	2.1%	-23.4%
Phoenix – Retail	$163.4	7.8%	0.4%
Phoenix – Self Storage	$0.0	0.0%	0.0%
Pittsburgh – Pittsburgh, PA MSA	$103.2	2.2%	-0.8%
Pittsburgh – Hotel	$72.1	27.1%	-12.8%
Pittsburgh – Industrial	$0.0	0.0%	0.0%
Pittsburgh – Multifamily	$0.0	0.0%	0.0%
Pittsburgh – Office	$15.3	1.6%	0.0%
Pittsburgh – Other	$08.0	2.1%	0.0%
Pittsburgh – Retail	$07.8	1.2%	0.0%
Pittsburgh – Self Storage	$0.0	0.0%	0.0%
Portland – Portland-Vancouver-Beaverton, OR-WA MSA	$502.1	7.4%	0.4%
Portland – Hotel	$471.1	54.5%	10.4%
Portland – Industrial	$0.0	0.0%	0.0%
Portland – Multifamily	$10.2	0.2%	0.0%
Portland – Office	$20.8	6.1%	5.5%
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	$11.9	0.3%	-0.9%
Raleigh – Hotel	$11.9	3.7%	-0.1%
Raleigh – Industrial	$0.0	0.0%	0.0%
Raleigh – Multifamily	$0.0	0.0%	0.0%
Raleigh – Office	$0.0	0.0%	-6.7%
Raleigh – Other	$0.0	0.0%	0.0%
Raleigh – Retail	$0.0	0.0%	-3.0%
Raleigh – Self Storage	$0.0	0.0%	0.0%
Richmond – Richmond, VA MSA	$121.7	3.6%	-0.2%
Richmond – Hotel	$39.3	14.1%	-1.1%
Richmond – Industrial	$0.0	0.0%	-5.4%
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	$82.4	15.5%	-0.4%
Richmond – Self Storage	$0.0	0.0%	0.0%
Riverside – Riverside-San Bernardino-Ontario, CA MSA	$370.0	3.9%	0.1%
Riverside – Hotel	$79.7	26.0%	5.3%
Riverside – Industrial	$0.0	0.0%	0.0%
Riverside – Multifamily	$06.7	0.2%	0.2%
Riverside – Office	$0.0	0.0%	0.0%
Riverside – Other	$0.0	0.0%	0.0%
Riverside – Retail	$283.6	13.7%	0.6%
Riverside – Self Storage	$0.0	0.0%	0.0%
Sacramento – Sacramento-Arden-Arcade-Roseville, CA MSA	$30.3	0.5%	0.0%
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	$10.9	2.1%	0.1%
Sacramento – Other	$0.0	0.0%	0.0%
Sacramento – Retail	$13.7	1.7%	0.0%
Sacramento – Self Storage	$0.0	0.0%	0.0%
Salt Lake City – Salt Lake City, UT MSA	$47.1	1.2%	0.0%
Salt Lake City – Hotel	$47.1	16.5%	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 – San Antonio, TX MSA	$141.2	2.2%	-0.2%
San Antonio – Hotel	$08.4	2.5%	1.7%
San Antonio – Industrial	$0.0	0.0%	0.0%
San Antonio – Multifamily	$0.0	0.0%	-0.1%
San Antonio – Office	$0.0	0.0%	0.0%
San Antonio – Other	$0.0	0.0%	0.0%
San Antonio – Retail	$131.3	15.0%	-1.3%
San Antonio – Self Storage	$01.5	1.1%	0.1%
San Diego – San Diego-Carlsbad-San Marcos, CA MSA	$258.8	2.3%	0.4%
San Diego – Hotel	$122.3	6.3%	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	3.3%	0.0%
San Diego – Retail	$115.9	9.7%	0.0%
San Diego – Self Storage	$0.0	0.0%	0.0%
San Francisco – San Francisco-Oakland-Fremont, CA MSA	$304.4	1.3%	0.0%
San Francisco – Hotel	$189.5	8.3%	0.1%
San Francisco – Industrial	$0.0	0.0%	0.0%
San Francisco – Multifamily	$17.8	0.2%	0.0%
San Francisco – Office	$18.8	0.2%	0.0%
San Francisco – Other	$30.6	1.7%	0.0%
San Francisco – Retail	$47.7	3.8%	0.1%
San Francisco – Self Storage	$0.0	0.0%	0.0%
San Jose – San Jose-Sunnyvale-Santa Clara, CA MSA	$104.3	0.7%	0.0%
San Jose – Hotel	$89.6	4.5%	0.1%
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 – Seattle-Tacoma-Bellevue, WA MSA	$100.0	0.6%	-0.2%
Seattle – Hotel	$100.0	7.8%	-1.3%
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%	-0.4%
Seattle – Self Storage	$0.0	0.0%	0.0%
St. Louis – St. Louis, MO-IL MSA	$390.0	9.4%	-0.5%
St. Louis – Hotel	$34.4	14.6%	-6.0%
St. Louis – Industrial	$0.0	0.0%	0.0%
St. Louis – Multifamily	$23.1	1.4%	0.0%
St. Louis – Office	$107.1	19.2%	-0.2%
St. Louis – Other	$26.4	4.9%	-0.3%
St. Louis – Retail	$199.0	20.4%	0.6%
St. Louis – Self Storage	$0.0	0.0%	0.0%
Tampa – Tampa-St. Petersburg-Clearwater, FL	$301.3	3.3%	0.1%
Tampa – Hotel	$30.8	2.7%	0.8%
Tampa – Industrial	$0.0	0.0%	0.0%
Tampa – Multifamily	$02.6	0.0%	0.0%
Tampa – Office	$23.8	4.2%	0.0%
Tampa – Other	$0.0	0.0%	0.0%
Tampa – Retail	$244.2	26.3%	0.3%
Tampa – Self Storage	$0.0	0.0%	0.0%
Tucson – Tucson, AZ MSA	$163.8	5.6%	-0.3%
Tucson – Hotel	$01.4	0.6%	0.0%
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	$162.5	23.9%	-1.3%
Tucson – Self Storage	$0.0	0.0%	0.0%
Virginia Beach – Virginia Beach-Norfolk-Newport News, VA-NC MSA	$209.0	4.9%	1.9%
Virginia Beach – Hotel	$09.3	2.1%	0.0%
Virginia Beach – Industrial	$21.2	13.4%	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	$178.5	21.0%	9.3%
Virginia Beach – Self Storage	$0.0	0.0%	0.0%
Washington, DC – Washington-Arlington-Alexandria, DC-VA-MD-WV MSA	$825.5	3.0%	0.0%
Washington, DC – Hotel	$48.5	5.1%	-0.4%
Washington, DC – Industrial	$11.2	2.1%	0.0%
Washington, DC – Multifamily	$01.3	0.0%	0.0%
Washington, DC – Office	$366.1	6.0%	0.3%
Washington, DC – Other	$249.7	13.5%	0.7%
Washington, DC – Retail	$148.8	5.6%	-0.1%
Washington, DC – Self Storage	$0.0	0.0%	0.0%
Grand Total	$26,658.7	4.1%	0.0%

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Non-Performing Matured Loans

CRED iQ

February 1, 2022

This week, CRED iQ reviewed real-time valuations for several assets that secure non-performing matured loans. Maturity defaults often can be a result of distress but may also be a mismatch in the timing of a refinancing effort or a sale closing. Many of this week’s assets had high concentrations of lease rollover over the next 12 to 36 months. Prospective lenders generally view lease rollover risk unfavorably given the possibility of tenants vacating with subsequent impairment of net cash flow at the collateral. However, non-performing matured loans are opportunities for distressed investors to step in and infuse capital in situations where traditional solutions may not be an option. This week’s highlights include 4 retail properties and a suburban office property in Fairfax, VA.

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.

Siegen Plaza

156,418 sf, Retail, Baton Rouge, LA [View Details]

This $16.6 million interest-only loan failed to pay off at its January 6, 2022 maturity date after the borrower asked for an extension, which was not granted. Prior to the maturity default, the borrower had indicated plans to pay off the loan at maturity. The mortgage is secured by a 156,418-sf retail center comprising two freestanding retail strips as well as an outparcel leased to Olive Garden. The larger of the two primary buildings is attached to a Target, which does not serve as collateral for the loan. The property’s 3 largest tenants — Ross Dress for Less, HomeGoods, and Petco — account for a combined 44% of the property’s NRA and all have leases that are scheduled to expire in 2024. The elevated concentration of near-term lease rollover may be the source of complications related to the loan’s maturity default. The borrower ideally would benefit from more favorable refinancing terms with long-term extensions with primary tenants in place, whereas prospective lenders may view the near-term lease expirations as a credit risk. Ross Dress for Less and Petco previously signed 10-year extensions in 2014. With all 3 primary tenants in place, the property has generated net cash flow in excess of $2 million for the previous 3 years. For the full valuation report and loan-level details, click here.

Property Name	Siegen Plaza
Address	^{6725 Siegen Lane Baton Rouge, LA 70809}
Outstanding Balance	$16,600,000
Interest Rate	5.49%
Maturity Date	1/6/2022
Most Recent Appraisal	$30,800,000 ($197/sf)
Most Recent Appraisal Date	10/31/2011

Fairfax Ridge

66,812 sf, Suburban Office, Fairfax, VA [Vie w Details]

This $9 million loan had a maturity default on December 11, 2021. Prior to the maturity default, the borrower had asked for a maturity extension through March 2022, which was not yet granted. Difficulty in securing refinancing is likely related to near-term lease rollover risk stemming from the collateral property’s largest tenant, the General Services Administration (GSA). The GSA had a 37,819-sf lease, accounting for 57% of the NRA, that was scheduled to expire on January 31, 2022; however, updated commentary from the servicer stated that the GSA signed a one-year extension. The short-term agreement may be problematic for the borrower in its attempts to secure long-term financing given the work-from-home trends within the office sector and the GSA’s recent rethinking on federal office space. The remainder of the collateral property’s space, 43% of the property’s NRA, is leased to AVIXA – Audio Visual and Integrated Experience Association pursuant to a lease that expires in October 2026. For the full valuation report and loan-level details, click here.

Property Name	Fairfax Ridge
Address	^{11242 Waples Mill Road Fairfax, VA 22030}
Outstanding Balance	$8,963,613
Interest Rate	6.28%
Maturity Date	12/11/2021
Most Recent Appraisal	$15,400,000 (231/sf)
Most Recent Appraisal Date	11/3/2011

Park Lee Shopping Center

75,559 sf, Retail, Phoenix, AZ [View Details]

This $7.4 million loan defaulted at maturity on January 6, 2022 but had not yet transferred to special servicing as of writing. Servicer commentary for the loan indicated that the borrower had previously applied for COVID-related relief but an agreement was never finalized. The loan is secured by a 75,559-sf retail center in Phoenix, AZ, located approximately 5 miles north of the CBD. The property is anchored by a Goodwill Store and Donation Center pursuant to a 29,919-sf lease, accounting for 40% of the NRA, that is scheduled to expire in August 2025. The retail center also features a Planet Fitness that occupies 20,750 sf, accounting for 28% of the NRA, with a lease that expires in 2027. Lease rollover risk does not appear to be an immediate concern until 2025 based on the status of the property’s rent roll. However, the borrower’s prior request for relief may indicate underlying cash flow issues while also considering heavy reliance on a fitness tenant that was likely impacted during the height of the pandemic. For the full valuation report and loan-level details, click here.

Park Lee Shopping Center - MSBAM 2016-C28

Property Name	Park Lee Shopping Center
Address	^{1615 West Camelback Road Phoenix, AZ 85015}
Outstanding Balance	$7,346,399
Interest Rate	5.32%
Maturity Date	1/6/2022
Most Recent Appraisal	$10,700,000 ($142/sf)
Most Recent Appraisal Date	8/31/2015

Russell Center

120,378-sf, Grocery-Anchored Retail, Ashland, KY [View Details]

This $5.8 million loan failed to pay off at its maturity on January 6, 2022 despite no immediately apparent credit issues. The loan is secured by a 120,378-sf retail center in Ashland, KY that is anchored by a Kroger. Kroger’s lease accounts for 48% of the property NRA and expires in April 2025. The nearest second location for Kroger is approximately 3 miles away. The property’s second-largest tenant, Dollar Tree, accounts for 8% of the property’s NRA but faces a high-level of competition with a total of 4 Dollar General stores within a 4-mile radius. The latest servicer commentary for the loan indicates the borrower was in the process of securing refinancing. Based on the positive sentiment of the commentary, a favorably and timely resolution may be on the horizon. For the full valuation report and loan-level details, click here.

Property Name	Russell Center
Address	^{370 Diederich Boulevard Ashland, KY 41101}
Outstanding Balance	$5,783,966
Interest Rate	6.15%
Maturity Date	1/6/2022
Most Recent Appraisal	$9,700,000 ($81/sf)
Most Recent Appraisal Date	11/7/2021

Edgewood Square Shopping Center

74,304 sf, Grocery-Anchored Retail, Jacksonville, FL [View Details]

This $2.5 million loan failed to pay off at its January 6, 2022 maturity date following an extension request by the borrower. The borrower may need an extension to resolve lease rollover issues at the collateral property, a 74,034-sf grocery-anchored retail center in Jacksonville, FL. The property’s two largest tenants have lease expirations in 2022. Harveys Supermarket is the grocery anchor at the property and accounts for 59% of the building’s NRA pursuant to a lease that expires on August 31, 2022. A freestanding Harveys Supermarket is located 2.5 miles away from the Edgewood Square location. Additionally, Family Dollar is the second-largest tenant with an 8,450-sf lease, accounting for 11% of the NRA, that expires on December 31, 2022. Finding financing to pay off the loan could prove to be difficult with aggregate rollover of 71% of the NRA at the property taking place in 2022. For the full valuation report and loan-level details, click here.

Edgewood Shopping Center - GSMS 2012-GC6

Property Name	Edgewood Shopping Center
Address	^{2261 Edgewood Ave W Jacksonville, FL 32209}
Outstanding Balance	$2,539,298
Interest Rate	5.93%
Maturity Date	1/6/2022
Most Recent Appraisal	$4,600,000 ($62/sf)
Most Recent Appraisal Date	10/10/2011

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February 2022 Delinquency Report

CRED iQ

January 31, 2022

The CRED iQ overall delinquency rate had a sharp decline this month, following a modest decline in the previous month, resulting in the 20^th 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 sample universe of $500+ billion in CMBS conduit and single-asset single-borrower (SASB) loans was 4.32%, which compares to the prior month’s rate of 4.59%. 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 6.91% from 7.06%. The special servicing rate is at its lowest point since May 2020 and has declined for two consecutive months after a temporary increase in November 2021. Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 6.87% 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 7.01%, which was congruent with the declines in both the delinquency and special servicing rates.

*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*

On a more granular level, the individual delinquency rate for office retraced to 2.31%, compared to 2.74% in the prior month, after increasing for two straight months. One driver behind this month’s decline in the office delinquency rate was the delinquency cure of the $1.2 billion 245 Park Avenue loan, which was paid current but still remains in special servicing. The delinquency rate for the lodging sector — 8.95% — also decreased compared to the prior month when it was 9.71%. Conversely, the delinquency rate for retail exhibited an increase to 7.73% from 7.52% last month. Over the prior 12 months, hotel delinquency has improved at a much faster pace than retail. As a result, the delinquency rates for hotel and retail are the closest they have been since pre-pandemic.

Despite continued delinquency declines in the lodging sector, many hotel loans continue to miss debt service payments. Notable new delinquencies this month included the $200 million Hyatt Regency Huntington Beach Resort & Spa, secured by a 517-key lodging property in Orange County, CA, and the $21.1 million Hotel Milo loan, secured by a 121-key hotel in Santa Barbara, CA.

Special servicing rates by property type generally remained in line with prior periods with modest changes. The special servicing rates for the lodging and multifamily sectors exhibited nominal declines and the retail, industrial, and self storage property types exhibited relatively small increases in special servicing rates. The special servicing rate for office properties, 3.46%, remained unchanged from the prior month.

CRED iQ also monitors an overall distressed rate (DQ + SS%) by property type to account for loans that qualify for either delinquent or special servicing subsets. The overall distressed rates typically track slightly higher than special servicing rates as most delinquent loans are also with the special servicer. This month, overall distressed rates for retail, office, and industrial increased while lodging, multifamily and self storage declined. Two of the largest loans to transfer to special servicing this month remained current in payment — the $59.6 million Writer Square loan, secured by a mixed-use property in Denver, CO, and the $59.4 million TEK Park loan, secured by an office property in Lehigh Valley, PA. For additional information for these 3 loans, click View Details below:

	[View Details]	[View Details]
Loan	Writer Square	TEK Park
Balance	$59,622,561	$59,379,382
Special Servicer Transfer Date	12/13/2021	1/3/2022

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Most Active Secondary Markets in Multifamily

CRED iQ

January 26, 2022

After a slight year-over-year decline in m u ltifamily origination volume in 2020, lending activity sharply increased in 2021. Although final tallies of origination volume for multifamily properties have not been widely reported as of writing, lending was on pace for most of 2021 for double-digit growth compared to the prior year. CRED iQ tracked nearly $150 billion in multifamily originations in 2021, including CMBS conduit, Freddie Mac, Fannie Mae and Ginnie Mae securitizations. Fannie Mae alone financed close to $70 billion in multifamily loans. This sample of 2021 loan originations will likely grow in the near term as 2022 securitization issuance will continue to include loans originated in late-2021.

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Gateway markets, such as New York and Los Angeles, were leaders in the total number of multifamily loans originated in 2021 but the Dallas/Ft. Worth MSA had the highest total origination volume by loan balance. More than half of the loan origination activity within Dallas/Ft. Worth came from loans in Fannie Mae securitizations. In total, primary and gateway markets accounted for just over half of all loan originations that were tracked in 2021.

Looking beyond primary markets, an examination of secondary and tertiary market activity highlights areas with high growth potential. Additionally, secondary markets are areas of opportunity for loan originators to branch out and grow lending pipelines.

The Columbus, OH MSA had the most originations among secondary markets with nearly 100 loans totaling $1.1 billion in volume. San Antonio followed with the second-highest number of multifamily loan originations, but loans were significantly larger in size, equating to nearly $2.5 billion in origination volume. San Antonio was the largest of all secondary multifamily markets by aggregate loan origination balance. The average loan origination size for the San Antonio market was approximately $30 million, compared to $12.4 million in Columbus, OH.

Other MSAs included in the Top 10 secondary markets for 2021 multifamily loan originations included Indianapolis, Cincinnati, Tampa, Riverside, Virginia Beach, Oklahoma City, Tucson and Las Vegas. Despite relatively fewer loan originations, Oklahoma City was a standout out in terms of origination volume in 2021, ranking second highest in total origination balance with just under $2.0 billion. With Dallas as a top market for multifamily origination in 2021, Oklahoma City, located just three hours north, likely benefitted from investors expanding their reach into neighboring MSAs.

A trend of loan originations for non-traditional markets was also apparent in 2021. Non-metropolitan Texas exhibited elevated loan origination activity compared to other markets. Non-metropolitan Texas comprises any rural location that does not fall within the boundaries of the 20+ MSAs that CRED iQ tracks within the state of Texas. The presence of non-metropolitan regions on a list for Top Multifamily Origination Markets is further evidence of the expansion and growth of multifamily investment and financing that occurred in 2021.

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Recent Commercial Mortgage Originations

CRED iQ

January 25, 2022

cmbs_lenders_commercial_real_estate_lending_landscape-bmark2022b32 — This week’s landscape takes us to a view from the golf course at JW Marriott Desert Springs Resort & Spa — a property that secures one of this week’s featured new loan originations.

This week, CRED iQ reviewed the commercial real estate lending landscape and highlighted 5 properties that have secured financing in recent months. The highlighted loan originations featured an in-depth look at a lodging deal with a few structural enhancements prompted by the pandemic as well as 2 multifamily originations and some first looks at commercial mortgage originations that were completed so far in 2022. In certain cases, mortgage loans from properties’ prior financing packages were catalogued in CRED iQ’s system, which enables users to evaluate prior loan terms and pre-origination financial history.

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.

JW Marriott Desert Springs

884 keys, Full-Service Hotel, Palm Desert, CA

In prior Lending Landscape reports, the CRED iQ team noted the scarcity of hotel originations in 2021. New lodging originations can serve as guidance for new deals for lenders heading into 2022. Such is the case for this $128 million mortgage that was originated by Goldman Sachs on December 22, 2021 and is secured by the JW Marriott Desert Springs Resort & Spa. The loan was used to refinance $123.2 million in existing debt, which included a senior secured loan as well as a mezzanine loan. The loan required an upfront debt service reserve of approximately $6.5 million that is scheduled to be reduced evenly over a 12-month period. The loan sponsor, Tiffany Lam of Kam Sang Co., Inc., also contributed $2.4 million in equity. Additional structures of the loan include a five-year, interest-only term and a 4.995% interest rate. For comparison, the retired senior secured loan had an interest rate of 5.15%.

Using CRED iQ’s Comps functionality, a comparable loan origination was a $100 million mortgage funded in December 2020 by Ares Management Corporation. The floating-rate loan was secured by the La Quinta Re s ort & Club, a 777-key resort hotel located 10 miles south of the JW Marriott.

The JW Marriott Desert Springs appraised for a value of $306 million ($346,154/key), as of November 17, 2021, which implied an LTV of 42% and a cap rate of 6.66% based on the originator’s underwritten NCF. It is worth noting that the originator’s underwritten NCF was 37% higher than pre-pandemic NCF for full-year 2019 and 138% higher than 2021 NCF. The 2021 NCF was derived from the trailing 11-month period ended November 2021 plus a 1-month forecast of December 2021 performance. The property produced negative net cash flow in 2020. For the full valuation report and loan-level details, click here.

Subject Property
Name	JW Marriott Desert Springs
Address	^{74-855 Country Club Drive Palm Desert, CA 92260}
Property Type	Hotel
Property Subtype	Full-Service
Building Size	884 keys
Year Built	1987
Submarket	Palm Springs
County	Riverside
MSA	Riverside-San Bernardino-Ontario, CA
Origination Date	12/22/2021
Loan Amount	$128,000,000
Interest Rate	5.00%
Valuation
Appraised Value	$306,000,000 ($346,154/key)
Appraisal Date	11/17/2021
Appraisal LTV	41.80%
CRED iQ Base-Case Value	$247,000,000 ($279,393/key)

Westview Apartments

116 units, Multifamily, Hoboken, NJ

Applied Housing Management Co. secured $32.5 million in mortgage debt from NorthMarq on December 1, 2021 to refinance approximately $17.9 million in existing debt on the Westview Apartments affordable housing complex in Hoboken, NJ. The loan was structured with a 10-year term and a 30-year amortization schedule with an interest rate of 2.92%. 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, 4 months prior to maturity. One of CRED iQ’s most relevant comps for this new origination is a $33 million Fannie Mae loan that is secured by Columbian Towers — a 136-unit multifamily property located across the street from Westview Apartments. This comparable loan was originated in October 2016 and has a maturity date of November 1, 2023.

The mortgage debt is secured by fee interest in a 116-unit mid-rise multifamily property located within walking distance of the Hoboken/NJ Transit Terminal at 1 Hudson Place. Of the property’s 116 units, there are 108 affordable units, including 93 units (80% of total unit count) that are leased at rents less than or equal to 50% of area median income (AMI).

The property appraised for $49.4 million, equal to $425,862/unit, as of September 1, 2021, which implied an LTV of 66% and an implied cap rate of 4.83% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.

Subject Property
Name	Westview Apartments
Address	^{55 Bloomfield Street Hoboken, NJ 07030}
Property Type	Multifamily
Property Subtype	Mid Rise
Building Size	116 units
Year Built	1887
Submarket	Hudson Waterfront
County	Hudson
MSA	New York-Northern New Jersey-Long Island, NY-NJ-PA
Origination Date	12/1/2021
Loan Amount	$32,500,000
Interest Rate	2.92%
Valuation
Appraised Value	$49,400,000 ($425,862/unit)
Appraisal Date	9/1/2021
Appraisal LTV	65.70%
CRED iQ Base-Case Value	$46,700,000 ($402,626/unit)

Brickstone Villas

222 units, Multifamily, Killeen, TX

Goldman Sachs funded an $8.3 million mortgage on December 10, 2021 to fund the acquisition of Brickstone Villas in Killeen, TX. The 10-year loan was structured with interest-only debt service payments and an interest rate of 4.14%. 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, 4 months prior to maturity. One of CRED iQ’s highest scoring loan comps is a $10.5 million loan secured by the Century Plaza Apartments, located less than a mile away from Brickstone Villas. The comparable loan was originated in October 2019 and had an interest rate of 4.15%. Despite the similar interest rate, the comparable loan required amortizing payments based on a 30-year schedule.

Brickstone Villas, a garden-style complex, was renovated by seller prior to its sale to the borrower. As a result, reported occupancy figures prior to origination were as low as 76% in 2020. Occupancy recovered to approximately 92% as of November 2021. The property appraised for $13.1 million, equal to $59,000/unit, as of October 25, 2021, which results in an LTV of 63.5% and an implied cap rate of 5.08% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.

Subject Property
Name	Brickstone Villas
Address	^{2812 Lake Road Killeen, TX 76543}
Property Type	Multifamily
Property Subtype	Garden
Building Size	222 units
Year Built	1976
Submarket	Non-Metro TX
County	Bell
MSA	Killeen-Temple-Fort Hood, TX
Origination Date	12/10/2021
Loan Amount	$8,320,000
Interest Rate	4.14%
Valuation
Appraised Value	$13,100,000 ($59,000/unit)
Appraisal Date	10/25/2021
Appraisal LTV	63.50%
CRED iQ Base-Case Value	$13,250,000 ($59,681/unit)

Bankwell HQ

29,500 sf, Suburban Office, New Canaan, CT

One of the first featured originations in 2022 — Citigroup funded an $8.2 million mortgage on January 5th for the acquisition of a single-tenant office building in New Canaan, CT. The interest-only loan was structured with a 10-year term and has an interest rate of 3.74%. 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, 4 months prior to maturity.

Despite the presence of a single tenant at the collateral and credit risk weighted heavily on the backend of the 10-year term, the loan was not structured with an anticipated repayment date. The collateral property, a 3-story office building, is leased to Bankwell Financial Group pursuant to a lease that expires in August 2031, which is approximately 4 months prior to loan maturity. The building was renovated prior to Bankwell signing a lease and taking occupancy. The property appraised for a value of $13.5 million, equal to $458/sf, as of October 6, 2021, which resulted in an LTV of 61% and an implied cap rate of 6.66%. For the full valuation report and loan-level details, click here.

Subject Property
Name	Bankwell HQ
Address	^{258 Elm Street New Canaan, CT 06840}
Property Type	Office
Property Subtype	Suburban
Building Size	29,500 sf
Year Built	1983
Submarket	New Canaan
County	Fairfield
MSA	Bridgeport-Stamford-Norwalk, CT MSA
Origination Date	1/5/2022
Loan Amount	$8,200,000
Interest Rate	3.74%
Valuation
Appraised Value	$13,500,000 ($458/sf)
Appraisal Date	10/6/2021
Appraisal LTV	60.70%
CRED iQ Base-Case Value	$12,050,000 ($409/sf)

2374-2386 Grand Concourse

20,420 sf, Retail, Bronx, NY

Another example of a 2022 loan origination came in the form of a $6.8 million mortgage originated by Citigroup on January 6^th for the acquisition of a 2-story retail building in Bronx, NY. The interest-only loan had a term of 10 years and an interest rate of 3.61%. The loan will be locked out from prepayment for just over 2 years, and defeasance will be permitted after lockout through the remainder of the loan term until its open period, 3 months prior to maturity. One of CRED iQ’s most relevant loan comps is a $15 million loan secured by 237 East Fordham Road, a 24,000-sf retail building also located in Bronx, NY. The comparable loan was originated in 2017 and had an interest rate of 3.93%.

The collateral property is anchored by Blink Fitness pursuant to a 14,000-sf lease, equal to 69% of the NRA, that expires in May 2029, which is about 2.5 years prior to loan maturity. The property was appraised for $11.5 million, equal to $563/sf, as of December 3, 2021, which resulted in an LTV of 59% and an implied cap rate of 5.93%. For the full valuation report and loan-level details, click here.

Subject Property
Name	2374-2386 Grand Concourse
Address	^{2374-2386 Grand Concourse Bronx, NY 10458}
Property Type	Retail
Property Subtype	Urban Infill
Building Size	20,420 sf
Year Built	1924
Submarket	Bronx
County	Bronx
MSA	New York-Northern New Jersey-Long Island, NY-NJ-PA
Origination Date	1/6/2022
Loan Amount	$6,825,000
Interest Rate	3.61%
Valuation
Appraised Value	$11,500,000 ($563/sf)
Appraisal Date	12/3/2021
Appraisal LTV	59.30%
CRED iQ Base-Case Value	$9,347,000 ($458/sf)

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Bed Bath & Beyond Closures

CRED iQ

January 18, 2022

The iconic 20% off coupon will be available for use at fewer locations starting in February 2022 following the release of 37 locations by Bed Bath & Beyond that are slated for closure. The closures are the latest development in the retailer’s plan to close approximately 200 locations, which was originally announced in July 2020. The full list of closures can be found here.

CRED iQ examined the list and identified store locations that served as collateral for CMBS loans. At least 8 properties securing more than $300 million in outstanding debt were identified within CRED iQ’s CMBS universe that had exposure to impending Bed Bath & Beyond closures. Two of the loans are secured by properties that feature Bed Bath & Beyond as the largest tenant. Several of the closing stores had lease expirations scheduled for the end of January 2022, including the largest CMBS loan with exposure — the $133.5 million Waterfront at Port Chester. Many of Bed Bath & Beyond’s leases with near-term expirations likely have a low probability of renewal given the retailer’s closure initiatives and recent operational struggles.

The largest Bed Bath & Beyond storefront slated for closures is the 50,000-sf location at Atlanta’s Perimeter Square, which secures a $35 million loan. Bed Bath & Beyond’s lease size at this location is nearly twice of size of the retail chain’s average footprint and accounts for 27% of the property’s NRA. The lease was scheduled to expire in January 2025 so Bed Bath and Beyond may have the ability to auction the lease or sublease the dark space for the remainder of its term. The loan was originated in October 2018, less than 4 years ago. The property’s second largest tenant, Havertys Furniture, has a 44,000-sf lease, accounting for 24% of the property’s NRA, that is scheduled to expire in July 2022. If Bed Bath & Beyond and Havertys Furniture both vacate or go dark, then third-largest tenant TJ Maxx will be able to terminate its lease or pay reduced rent.

A list of all CMBS loans with exposure to Bed Bath and Beyond’s February closures appears below and includes links to free previews for each property on CRED iQ’s platform. CRED iQ subscribers also have access to updated valuations for each property, that account for the immediate loss of Bed Bath & Beyond as a tenant. CRED iQ valuations factor in a base-case (most likely), a downside (significant loss of tenants), and dark scenarios (100% vacant).

Property Name	Address	Outstanding Balance ($000’s)	Size (sf)	Bed Bath & Beyond Size (sf)	% NRA	Lease Expiration
Waterfront At Port Chester	^{5-40 Westchester Avenue Port Chester, NY 10573}	$133,500	349,743	36,068	10%	1/31/2022	[View Details]
Oxford Exchange	^{1000 Oxford Exchange Boulevard Oxford, AL 36203}	$35,209	333,975	20,950	6%	1/31/2022	[View Details]
Perimeter Square	^{130 Perimeter Center West Atlanta, GA 30346}	$35,000	186,059	50,000	27%	1/31/2025	[View Details]
El Paseo II and II	^{22235 El Paseo Rancho Santa Margarita, CA 92688}	$29,452	106,777	26,991	25%	1/31/2023	[View Details]
Triangle Cent er	^{1015 Ocean Beach Highway Longview, WA 98632}	$27,921	260,627	23,000	9%	1/31/2023	[View Details]
Meridian Crossroads	^{131 South Frontage Road Meridian, MS 39301}	$17,734	206,366	24,001	12%	1/31/2023	[View Details]
Pocatello Square	^{1732 Hurley Drive Pocatello, ID 83202}	$17,087	138,925	20,000	14%	9/7/2021	[View Details]
Sunset Plaza	^{4169 Sunset Drive San Angelo, TX 76904}	$8,308	89,144	20,000	22%	1/31/2021	[View Details]

Bed Bath & Beyond is one of several retailers that announced store closures over the past couple of months. On a larger scale, Bed Bath & Beyond closed more than 500 locations between year-end 2018 and year-end 2020. Year end is an opportune time for retailers to assess the performance of store fleets to identify underperformers, while still capitalizing on an end-of-year surge of holiday sales. Pharmacy chains CVS Health and Rite Aid both announced store closure initiatives in late-2021. All three major pharmacy retailers — Walgreens, CVS, and Rite Aid — have reduced physical store counts since 2018. Additionally, department store chain Macy’s continued to follow through with its pre-pandemic store optimization plan to close approximately 125 locations by announcing the permanent closure of six of those locations in early-2022. For a silver lining, not all retailers have been closing stores and optimizing locations. Dollar General, Dollar Tree, and TJ Maxx have opened more store locations on a net basis since 2018.

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