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October 2021 Delinquency Report

By
CRED iQ
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0

The overall delinquency rate declined for the 15th consecutive month since its peak in June 2020, continuing a trend of recovery from the spike in distressed assets caused by the pandemic. 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 5.30%. CRED iQ’s special servicing rate, equal to the percentage of CMBS loans that have transferred to special servicing, was equal to 7.57%. Aggregating these two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 7.81% of CMBS loans that are specially serviced, delinquent, or a combination of both.

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

By property type, lodging and retail had the highest individual delinquency rates. Delinquency for each property type declined compared to the prior month and each has exhibited an overall downward trend over the trailing twelve months. The lodging delinquency rate has made the most dramatic recovery over the past year, declining from just under 20% in October 2020 to approximately 11% in September 2021.

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

Despite a clear signal of improvement in the lodging sector, this property type showed the most volatility when evaluating performance across markets. Lodging accounted for 75% of the biggest month-over-month changes when broken out by market, as exhibited in the table above.

CRED iQ monitors market performance for nearly 400 MSAs across the United States covering over $900 billion in outstanding CRE debt. Minneapolis, Louisville, New Orleans, Cleveland, and Milwaukee continue to be the MSAs with the highest rate of distressed properties, which is consistent with the prior month. This month, Sacramento overtook Allentown as the MSA with the lowest distressed rate among the Top 50. The majority of MSAs saw improvements with overall declines in the percentage of distressed properties. Only 8 of the Top 50 MSAs exhibited additional distress compared to the prior month. The Salt Lake City market had the greatest improvement with nearly a 30% decrease in the percentage of distressed properties. The improvement was largely driven by South Towne Center, a 1.1 million-sf regional mall that returned from special servicing to the master servicer after a loan modification.

For the full CRED DQ report, download here:

The-CRED-DQ-Report-2021-10-1Download
MSA – Property Type DQ or SS (millions)  DQ/SS (%) Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA$19.40.6%0.01%
Hotel$0.00.0%0.00%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$19.45.1%0.00%
Self Storage$0.00.0%0.00%
Atlanta-Sandy Springs-Marietta, GA MSA$745.83.2%0.04%
Hotel$247.413.0%0.03%
Industrial$0.00.0%0.00%
Multifamily$4.70.0%0.00%
Office$34.01.4%0.21%
Other$0.00.0%0.00%
Retail$459.717.0%-0.10%
Self Storage$0.00.0%0.00%
Austin-Round Rock, TX MSA$528.65.7%-0.24%
Hotel$419.145.1%0.42%
Industrial$0.00.0%0.00%
Multifamily$1.50.0%-0.55%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$105.515.7%0.13%
Self Storage$2.62.2%0.13%
Baltimore-Towson, MD MSA$416.64.3%-0.34%
Hotel$128.528.7%0.89%
Industrial$0.00.0%0.00%
Multifamily$8.80.1%0.04%
Office$22.93.6%0.01%
Other$0.00.0%0.00%
Retail$256.424.3%-2.25%
Self Storage$0.00.0%0.00%
Birmingham-Hoover, AL MSA$46.71.7%-0.11%
Hotel$22.622.4%0.99%
Industrial$0.00.0%0.00%
Multifamily$1.10.1%0.10%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$22.93.2%0.00%
Self Storage$0.00.0%0.00%
Boston-Cambridge-Quincy, MA-NH MSA$384.82.2%0.14%
Hotel$127.016.7%2.39%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$257.813.2%0.20%
Self Storage$0.00.0%0.00%
Bridgeport-Stamford-Norwalk, CT MSA$189.94.9%-0.77%
Hotel$63.651.4%-0.34%
Industrial$17.813.7%0.00%
Multifamily$0.00.0%0.00%
Office$63.25.3%-2.64%
Other$23.65.8%0.00%
Retail$21.76.9%0.82%
Self Storage$0.00.0%0.00%
Charlotte-Gastonia-Concord, NC-SC MSA$243.43.1%-1.24%
Hotel$118.710.5%-0.08%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$21.32.4%-0.02%
Other$85.024.2%-1.64%
Retail$18.41.7%-6.21%
Self Storage$0.00.0%0.00%
Chicago-Naperville-Joliet, IL-IN-WI MSA$1,998.57.4%-0.33%
Hotel$1,121.045.1%-7.54%
Industrial$0.00.0%0.00%
Multifamily$124.01.3%-0.13%
Office$393.05.6%0.20%
Other$101.25.1%-0.82%
Retail$259.37.7%-1.36%
Self Storage$0.00.0%0.00%
Cincinnati-Middletown, OH-KY-IN MSA$304.48.0%-0.59%
Hotel$141.046.3%-0.03%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%-0.10%
Office$11.52.2%-0.12%
Other$15.75.0%-0.01%
Retail$135.219.5%-1.33%
Self Storage$1.01.7%0.09%
Cleveland-Elyria-Mentor, OH MSA$503.612.4%-1.95%
Hotel$129.757.0%-2.04%
Industrial$0.00.0%0.00%
Multifamily$4.30.3%0.27%
Office$105.212.9%0.27%
Other$178.041.4%1.10%
Retail$86.411.4%-9.24%
Self Storage$0.00.0%0.00%
Columbus, OH MSA$251.94.3%0.06%
Hotel$84.426.8%0.05%
Industrial$11.92.8%-0.02%
Multifamily$4.30.1%0.00%
Office$12.52.8%0.42%
Other$0.00.0%0.00%
Retail$127.815.1%0.05%
Self Storage$11.018.9%1.03%
Dallas-Fort Worth-Arlington, TX MSA$926.22.7%-0.34%
Hotel$437.612.2%-0.12%
Industrial$1.70.1%0.00%
Multifamily$47.70.2%0.00%
Office$166.34.7%-0.89%
Other$23.81.1%-0.26%
Retail$237.19.5%-2.37%
Self Storage$11.92.4%0.14%
Denver-Aurora, CO MSA$312.31.9%-0.11%
Hotel$43.35.2%0.20%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$194.69.4%0.10%
Other$7.01.4%0.17%
Retail$64.14.2%-1.54%
Self Storage$3.32.0%0.19%
Detroit-Warren-Livonia, MI MSA$522.05.9%-0.87%
Hotel$308.542.6%0.98%
Industrial$45.98.5%-0.06%
Multifamily$38.81.1%-0.12%
Office$0.00.0%-0.40%
Other$22.43.5%0.10%
Retail$106.46.5%-3.61%
Self Storage$0.00.0%0.00%
Hartford-West Hartford-East Hartford, CT MSA$211.98.6%-0.03%
Hotel$89.162.7%2.15%
Industrial$0.00.0%0.00%
Multifamily$3.80.3%0.00%
Office$87.622.2%0.02%
Other$1.20.6%0.00%
Retail$30.312.8%0.25%
Self Storage$0.00.0%0.00%
Houston-Sugar Land-Baytown, TX MSA$1,427.15.2%-0.16%
Hotel$693.459.2%-0.41%
Industrial$4.20.6%-1.01%
Multifamily$67.60.5%-0.09%
Office$541.013.7%0.22%
Other$1.50.0%-0.84%
Retail$89.42.4%-0.21%
Self Storage$29.96.3%0.54%
Indianapolis-Carmel, IN MSA$389.27.8%-0.17%
Hotel$163.125.9%-0.69%
Industrial$0.00.0%0.00%
Multifamily$98.24.2%-0.33%
Office$75.912.7%2.11%
Other$9.84.5%-0.13%
Retail$38.17.1%0.06%
Self Storage$4.15.3%0.11%
Jacksonville, FL MSA$67.61.3%-0.02%
Hotel$38.69.2%0.33%
Industrial$0.00.0%0.00%
Multifamily$20.00.6%-0.01%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$9.02.1%0.00%
Self Storage$0.00.0%0.00%
Kansas City, MO-KS MSA$150.43.2%-0.33%
Hotel$85.027.0%-4.14%
Industrial$0.00.0%0.00%
Multifamily$7.60.3%-0.01%
Office$0.00.0%0.00%
Other$2.81.0%-0.26%
Retail$53.38.3%0.14%
Self Storage$1.70.8%0.05%
Las Vegas-Paradise, NV MSA$393.42.0%0.01%
Hotel$18.30.3%0.00%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$10.21.7%0.02%
Other$0.00.0%0.00%
Retail$362.07.6%0.02%
Self Storage$2.81.4%0.09%
Los Angeles-Long Beach-Santa Ana, CA MSA$1,943.54.0%-0.10%
Hotel$665.916.5%0.64%
Industrial$0.00.0%-0.18%
Multifamily$124.50.6%-0.05%
Office$389.33.3%0.19%
Other$170.65.6%-0.91%
Retail$589.78.8%-0.62%
Self Storage$3.50.4%0.00%
Louisville/Jefferson County, KY-IN MSA$631.720.2%-0.19%
Hotel$242.956.1%1.93%
Industrial$0.00.0%0.00%
Multifamily$3.80.3%-0.01%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$385.059.1%0.05%
Self Storage$0.00.0%0.00%
Memphis, TN-AR-MS MSA$156.76.5%0.00%
Hotel$56.329.0%1.53%
Industrial$0.00.0%0.00%
Multifamily$17.81.7%-0.01%
Office$0.00.0%0.00%
Other$18.433.6%-0.18%
Retail$62.615.4%0.03%
Self Storage$1.71.1%0.06%
Miami-Fort Lauderdale-Pompano Beach, FL MSA$682.43.2%-0.70%
Hotel$375.58.5%0.25%
Industrial$0.00.0%0.00%
Multifamily$6.70.1%0.01%
Office$21.61.1%0.01%
Other$8.70.6%0.01%
Retail$269.95.7%-3.18%
Self Storage$0.00.0%0.00%
Milwaukee-Waukesha-West Allis, WI MSA$254.910.4%-0.02%
Hotel$35.723.1%-0.01%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$66.311.8%0.19%
Other$0.00.0%0.00%
Retail$153.030.5%0.00%
Self Storage$0.00.0%0.00%
Minneapolis-St. Paul-Bloomington, MN-WI MSA$1,934.723.5%0.12%
Hotel$332.353.8%1.24%
Industrial$4.11.5%-0.03%
Multifamily$0.00.0%0.00%
Office$155.07.7%0.31%
Other$11.72.8%-0.14%
Retail$1,431.871.1%0.52%
Self Storage$0.00.0%0.00%
Nashville-Davidson-Murfreesboro-Franklin, TN MSA$222.03.5%-2.17%
Hotel$212.515.8%-9.00%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$9.51.2%-0.33%
Self Storage$0.00.0%0.00%
New Orleans-Metairie-Kenner, LA MSA$432.713.2%-1.17%
Hotel$396.637.4%-3.07%
Industrial$0.00.0%0.00%
Multifamily$13.41.7%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$22.83.1%0.21%
Self Storage$0.00.0%0.00%
New York-Northern New Jersey-Long Island, NY-NJ-PA MSA$6,558.75.6%-0.06%
Hotel$1,718.246.4%-3.41%
Industrial$7.50.4%0.00%
Multifamily$580.71.8%0.19%
Office$792.91.9%0.17%
Other$1,541.67.4%-0.44%
Retail$1,917.813.9%0.13%
Self Storage$0.00.0%0.00%
Orlando-Kissimmee, FL MSA$445.53.9%-0.20%
Hotel$169.86.0%-0.49%
Industrial$0.00.0%0.00%
Multifamily$25.40.4%0.00%
Office$47.19.6%0.01%
Other$0.00.0%0.00%
Retail$203.223.6%3.08%
Self Storage$0.00.0%0.00%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA$934.15.1%-0.25%
Hotel$340.336.6%-4.31%
Industrial$0.00.0%0.00%
Multifamily$117.41.3%-0.02%
Office$57.61.5%0.23%
Other$57.14.2%-1.44%
Retail$361.614.3%0.06%
Self Storage$0.00.0%0.00%
Phoenix-Mesa-Scottsdale, AZ MSA$428.32.4%-0.62%
Hotel$57.63.6%-1.27%
Industrial$10.21.9%0.04%
Multifamily$0.00.0%0.00%
Office$23.81.1%-0.02%
Other$180.524.1%0.02%
Retail$156.37.2%-0.26%
Self Storage$0.00.0%0.00%
Pittsburgh, PA MSA$196.04.2%-0.03%
Hotel$123.645.8%2.91%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$15.41.7%0.00%
Other$8.12.1%0.02%
Retail$48.97.1%-0.17%
Self Storage$0.00.0%0.00%
Portland-Vancouver-Beaverton, OR-WA MSA$514.77.9%-0.31%
Hotel$502.962.7%3.51%
Industrial$0.00.0%0.00%
Multifamily$10.20.2%-0.01%
Office$1.60.5%0.00%
Other$0.00.0%0.00%
Retail$0.00.0%0.00%
Self Storage$0.00.0%0.00%
Raleigh-Cary, NC MSA$135.13.3%0.02%
Hotel$86.621.1%1.92%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$12.74.0%0.00%
Other$0.00.0%0.00%
Retail$35.89.1%0.95%
Self Storage$0.00.0%0.00%
Richmond, VA MSA$141.74.1%-0.09%
Hotel$50.617.8%0.00%
Industrial$6.94.8%-0.01%
Multifamily$0.00.0%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$84.315.3%0.00%
Self Storage$0.00.0%0.00%
Riverside-San Bernardino-Ontario, CA MSA$331.13.5%-0.66%
Hotel$84.818.4%1.27%
Industrial$0.00.0%0.00%
Multifamily$2.40.1%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$243.911.1%-2.76%
Self Storage$0.00.0%0.00%
Sacramento-Arden-Arcade-Roseville, CA MSA$31.00.6%-0.01%
Hotel$6.31.7%0.00%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$11.01.9%0.00%
Other$0.00.0%0.00%
Retail$13.71.8%-0.05%
Self Storage$0.00.0%0.00%
Salt Lake City, UT MSA$32.30.9%-4.16%
Hotel$32.310.7%-4.56%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$0.00.0%-29.87%
Self Storage$0.00.0%0.00%
San Antonio, TX MSA$193.33.0%-0.13%
Hotel$26.27.8%0.07%
Industrial$0.00.0%0.00%
Multifamily$13.10.3%0.12%
Office$0.00.0%0.00%
Other$0.00.0%-0.24%
Retail$152.517.3%-1.47%
Self Storage$1.50.9%0.07%
San Diego-Carlsbad-San Marcos, CA MSA$217.22.0%-0.19%
Hotel$79.53.9%0.17%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%-0.19%
Office$0.00.0%0.00%
Other$20.83.4%0.06%
Retail$117.010.0%-0.26%
Self Storage$0.00.0%0.00%
San Francisco-Oakland-Fremont, CA MSA$332.31.5%-0.02%
Hotel$212.09.1%0.16%
Industrial$0.00.0%0.00%
Multifamily$23.10.3%0.00%
Office$18.90.2%-0.01%
Other$30.61.7%0.01%
Retail$47.83.6%0.00%
Self Storage$0.00.0%0.00%
San Jose-Sunnyvale-Santa Clara, CA MSA$137.11.0%-0.27%
Hotel$122.36.1%-1.59%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$14.70.2%0.00%
Other$0.00.0%0.00%
Retail$0.00.0%0.00%
Self Storage$0.00.0%0.00%
Seattle-Tacoma-Bellevue, WA MSA$201.91.2%-0.26%
Hotel$195.115.5%-2.47%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$6.80.4%0.00%
Self Storage$0.00.0%0.00%
St. Louis, MO-IL MSA$422.69.7%0.06%
Hotel$58.620.6%-0.01%
Industrial$0.00.0%0.00%
Multifamily$23.31.4%-0.01%
Office$107.019.1%-0.06%
Other$24.74.9%0.01%
Retail$209.020.5%0.37%
Self Storage$0.00.0%0.00%
Tampa-St. Petersburg-Clearwater, FL$385.84.2%0.23%
Hotel$74.96.5%0.18%
Industrial$0.00.0%0.00%
Multifamily$34.70.6%0.01%
Office$20.33.4%-0.65%
Other$0.00.0%0.00%
Retail$256.027.4%8.65%
Self Storage$0.00.0%0.00%
Tucson, AZ MSA$265.29.2%1.73%
Hotel$1.40.5%0.00%
Industrial$0.00.0%0.00%
Multifamily$0.00.0%0.00%
Office$0.00.0%0.00%
Other$0.00.0%0.00%
Retail$263.839.5%20.83%
Self Storage$0.00.0%0.00%
Virginia Beach-Norfolk-Newport News, VA-NC MSA$155.63.6%-2.17%
Hotel$24.65.3%0.04%
Industrial$21.213.1%0.01%
Multifamily$0.00.0%0.00%
Office$12.43.0%-0.02%
Other$0.00.0%0.00%
Retail$97.311.9%-8.71%
Self Storage$0.00.0%-9.91%
Washington-Arlington-Alexandria, DC-VA-MD-WV MSA$787.02.8%-0.75%
Hotel$59.15.3%-0.01%
Industrial$0.00.0%0.00%
Multifamily$1.30.0%0.00%
Office$309.14.5%-3.42%
Other$249.712.3%-0.16%
Retail$167.95.4%0.02%
Self Storage$0.00.0%0.00%
Grand Total$29,139.04.4%-0.28%

Specially Serviced Loans

By
CRED iQ
-
0

This week, CRED iQ calculated real-time valuations for 5 distressed properties that have transferred to special servicing within the past 3 months, including a regional mall located in Lancaster, PA and 2 mixed-used properties located in Lower Manhattan. One of the highlighted properties, a medical condo located in the Upper East Side of Manhattan, transferred to special servicing only 8 months after origination and may have raised some eyebrows in the process.

The 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.

Park City Center

1.4 million sf, Regional Mall, Lancaster, PA 17601

This $115.5 million loan failed to pay off at maturity on September 9, 2021 and transferred to special servicing. The borrower, Brookfield Property Partners, requested an extension, and KeyBank, as special servicer, is reviewing the request. The loan maturity was previously extended through a November 2020 modification agreement that required Brookfield to curtail $13.5 million in principal. Despite the maturity default, an additional $6.0 million in principal was curtailed in September, which could be related to a second extension. Overall, the loan has de-levered by approximately 14% from its original balance of $135.0 million. Unfortunately, the decline in value of the collateral property since origination may have been steeper than the principal paydowns to date.

The loan is secured by Park City Center, a regional mall located in Lancaster, PA that is anchored by JCPenney, Boscov’s, Kohl’s, and Round1 Entertainment – although Boscov’s owns its land and improvements. These tenants may serve as traditional anchors but much of the foot traffic is derived from the Apple Store, which had plans at loan origination to expand its space into an updated store concept. The presence of the Apple Store is one of the few positives for the asset, which was hit hard by the pandemic and co-tenancy clauses from previous closures of Sears and The Bon-Ton. Since loan origination, the following tenants have vacated or no longer have a presence at Park City Center: Williams-Sonoma, TGI Friday’s, Justice, GNC, Christopher & Banks, Finish Line, The Walking Company, Motherhood Maternity, and Clarks. Net cash flow at the property declined approximately 37% from TTM June 2019 through year-end 2020, which corresponded to a significant decline in value for the property. A June 2019 appraisal for the property indicated an LTV of 53%; however, CRED iQ’s Base-Case valuation implies a more conservative LTV closer to 70% even after reductions in principal over the past 2 years. With Brookfield actively looking for refinancing, leverage levels and the potential contribution of additional equity could be key factors for getting a deal done for mortgage originators and other lenders. 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.

Property NamePark City Center
Address142 Park City Center
Lancaster, PA 17601
Outstanding Balance$115,500,000
Interest Rate4.11%
Maturity Date9/9/2021
Most Recent Appraisal$254,400,000
Most Recent Appraisal Date6/27/2019

428 Broadway

53,418 sf, Mixed-Used (Office/Retail), New York, NY 10013

This $60.0 million loan transferred to special servicing on September 2, 2021 due to delinquency. This distressed loan is yet another product of the fallout from the struggles of WeWork, which served as a primary tenant. WeWork had leased 77% of the collateral property’s GLA at origination, but a lease termination was approved by the lender. The lease termination fee may have been in excess of $3.0 million, according to servicer data. Multiple workouts are being evaluated including foreclosure or a note sale.

The floating-rate loan was originated in March 2020 by LoanCore Capital as bridge financing to allow the borrower to recapitalize the collateral property, which is a mixed-use office building with ground floor retail located in the SoHo submarket of Manhattan. The loan sponsor, Jacob Chetrit, had planned to lease the ground-floor and below-grade retail space, which totaled 12,203 sf and was vacant at origination. However, the retail space remains vacant with a tough leasing environment for high-street retail in Manhattan. The departure of WeWork now leaves the entire building 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.

Property Name428 Broadway
Address428 Broadway
New York, NY 10013
Outstanding Balance$60,000,000
Interest Rate4.90%
Maturity Date4/9/2023
Most Recent Appraisal$95,000,000
Most Recent Appraisal Date2/6/2018

Shops At Mauna Lani

78,301 sf, Retail, Waimea, HI 96743

This $19.6 million loan transferred to special servicing on July 23, 2021 and is a potential refinance opportunity. The loan failed to pay off at maturity in April 2021 and the borrower, Arciterra, requested an extension that was approved. However, the loan originator, Money360, Inc., was concurrently working on a refinance solution. Both extension and refinancing alternatives are being evaluated.

The loan is secured by a leasehold interest in a retail property located in Waimea, HI on the Big Island. The property serves as a captive retail destination for travelers staying at the Mauna Lani resort and features primarily restaurant and apparel tenants. Although Hawaii tourism levels continue to improve from pandemic lockdown lows in 2020, the property has hasn’t improved occupancy greater than 83%. Occupancy was approximately 91% at loan origination. Further complicating matters, annual ground rent for the property is in excess of $800,000.

Using CRED iQ’s newly launched COMPS software, our team identified King’s Shops as a highly relevant comparable property. Similar to the Shops At Mauna Lani, King’s Shops is a captive retail development that serves guests of the Waikoloa Beach Marriott Resort & Spa. The King’s Shops recently went into receivership following its own struggles with the disruption of Hawaiian tourism caused by the pandemic. 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.

Property NameShops At Mauna Lani
Address68-1330 Mauna Lani Drive
Waimea, HI 96743
Outstanding Balance$19,625,000
Interest Rate8.00%
Maturity Date4/1/2021
Most Recent Appraisal$30,950,000
Most Recent Appraisal Date3/1/2019

394 Broadway

32,285 sf, Mixed-Use (Retail/Office), New York, NY 10013

This $18.65 million loan transferred to special servicing on July 9, 2021 for the purpose of inking a loan modification. The collateral property had been adversely impacted by the pandemic and occupancy has declined since loan origination in March 2019. The loan modification was negotiated with LNR Securities Holdings as special servicer and will likely be designed to provide relief and give the borrower an opportunity to address the property’s vacancy.

The collateral property is a 32,285-sf mixed-used building located in the Tribeca submarket of Manhattan. With a high volume of vacancies up and down Broadway, the ground-floor retail portion of the building may take relatively longer to lease compared to any vacant office space. The property was 67% occupied at the time of its transfer to special servicing. 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.

Property Name394 Broadway
Address394 Broadway
New York, NY 10013
Outstanding Balance$18,650,000
Interest Rate5.41%
Maturity Date4/1/2029
Most Recent Appraisal$29,500,000
Most Recent Appraisal Date1/14/2019

1049 5th Avenue

7,751 sf, Office, New York, NY 10028

This $4.5 million loan transferred to specially servicing on August 24, 2021, just 9 months after origination. Special servicer commentary indicated a receiver was appointed for the collateral property. It is worth noting that the borrower sponsor, Jean-Francois Simon, was subject to ongoing litigation at the time of loan origination in December 2020. The loan is secured by a 7,751-sf medical office condominium unit located in the Upper East Side of Manhattan. The office condominium is on the ground floor and is part of a larger residential building with 67 units and 2 other office units. The property is leased to Fifth Avenue Surgery Center, Inc. through December 2025. 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.

Property Name1049 5th Avenue
Address1049 5th Avenue
New York, NY 10028
Outstanding Balance$4,500,000
Interest Rate4.32%
Maturity Date1/1/2031
Most Recent Appraisal$10,800,000
Most Recent Appraisal Date8/24/2020

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. For full access to our loan database and valuation platform, sign up for a free trial below:

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Recent Commercial Mortgage Originations

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CRED iQ
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This week, CRED iQ reviewed the commercial real estate lending landscape and highlighted 5 properties that have secured financing within the past month. 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 the originators’ LTVs, similar to last month’s WAR Report on the lending landscape. The 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.

Parkway Irvine

209,831 sf, Flex Industrial, Irvine, CA 92618

A $37.0 million loan was originated by Société Générale Financial Corporation (SocGen) on August 30, 2021 to refinance existing debt of $16.7 million and return approximately $19.6 million in equity to the loan sponsor, Paul Queyrel – president of TriQuest Development Company. The loan was structured with a 10-year term and requires interest-only payments at a rate of 3.13%. The loan will be locked out from prepayment for 2 years, and after lockout will require a yield maintenance charge for prepayment prior to its open period. CRED iQ’s most relevant comp is the $15.0 million Newport Court loan, which was originated in January 2021 and has an interest rate of 2.97%. Newport Court is secured by a 212,283-sf industrial property that is also located in Irvine, CA.

The Parkway Irvine loan is secured by fee interest in a 209,831-sf industrial property that was developed in 1989 and features 12 buildings set across 14 acres located in Irvine, CA. Most of the buildings operate as single-story flex buildings and approximately 34% of the GLA is primarily used as office space. The property was 88% occupied as of August 16, 2021 and no individual tenants account for greater than 4% of the GLA. With such a granular rent roll, lease rollover management will be relevant in 2023 and 2024 when leases accounting for a combined 52% of the GLA are scheduled to expire. A July 23, 2021 appraisal valued the property at $62.4 million, equal to $279/sf, which implied an LTV of 59.30% and a capitalization rate of 5.47% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.

Subject Property
NameParkway Irvine
Address15375 Barranca Parkway
Irvine, CA 92618
TypeIndustrial
SubtypeFlex
Building Size209,831 sf
Year Built1989
SubmarketIrvine Spectrum
CountyOrange
MSALos Angeles-Long Beach-Santa Ana, CA
Origination Date08/30/2021
Loan Amount$37,000,000
Interest Rate3.13%
Valuation
Appraisal Value$62,400,000
Appraisal Date07/23/2021
Appraisal LTV59.30%
MyQ Concluded Value$60,440,000

15-17 Park Avenue

97 units, Multifamily, New York, NY 10016

A $31.0 million loan was originated by SocGen on August 16, 2021 to refinance existing debt on a 97-unit high-rise multifamily building located on the edge of the Murray Hill submarket of Manhattan, NY. The 10-year interest-only loan has an interest rate of 3.34%. 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. The borrower sponsor for the loan is Scott Goldstein. CRED iQ’s highest scoring comp is the $14.8 million 234-236 East 24th Street loan, which was originated in March 2020 and has an interest rate of 3.10%. The comparable loan is secured by a 36-unit multifamily property located slightly south of the subject, closer to Kips Bay.

The 15-17 Park Avenue mortgage loan is secured by fee interest in a 16-story multifamily property that contains 85 units that lease at market rate and 11 units that are rent stabilized. One unit is reserved for the superintendent and the property features an additional 2,810 sf of commercial space. Average asking rent for Q1 2021 was $3,802 per unit, which represented a 5% decline compared to 2020 and a 21% decline compared to 2019. The rent declines exemplify the downward pressure on rents caused by the pandemic. The property typically operated with about 98% occupancy pre-COVID but occupancy declined to 93%/94% for much of 2020 and 2021. Occupancy was listed as 100% as of July 20, 2021, including all residential and commercial units. The property was appraised for $50.1 million as of July 8, 2021, equal to $516,500/unit, which implied an LTV of 61.90% and a capitalization rate of 4.27% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.

Subject Property
Name15-17 Park Ave
Address15-17 Park Avenue
New York, NY 10016
TypeMultifamily
SubtypeHigh Rise
Building Size97 units
Year Built1924
SubmarketMurray Hill
CountyNew York
MSANew York-Northern New Jersey-Long Island, NY-NJ-PA
Origination Date08/16/2021
Loan Amount$31,000,000
Interest Rate3.34%
Valuation
Appraisal Value$50,100,000
Appraisal Date07/08/2021
Appraisal LTV61.90%
MyQ Concluded Value$44,590,000

Murrieta Spectrum

172,357 sf, Mixed-Use (Retail/Office), Murrieta, CA 92562

A $23.0 million loan was originated by UBS on August 27, 2021 to refinance existing debt on a 172,357-sf retail property located in Murrieta, CA, just north of Temecula. The loan has a 10-year term and requires amortizing debt service payments based on a 30-year schedule with an interest rate 3.73%. The loan is locked out from prepayment for 1 year, and after lockout will require a yield maintenance charge for prepayment prior to its open period. CRED iQ’s most relevant comp is the $16.2 million Bel Villaggio loan, which was originated in February 2020 and has an interest rate of 3.57%. Bel Villaggio is located in nearby Temecula and has similar size and use as Murrieta Spectrum, although with a much more granular rent roll.

Although property information provided for Murrieta Spectrum lists the property type as mixed-use, the collateral for the loan is primarily designed and operated as a retail center. The largest tenants are Ashley Furniture and Savers Thrift Store, which are both retail tenants and account for a combined 45% of the GLA. The third-largest tenant, STG International, accounts for another 15% of the GLA, but the tenant will not take occupancy until October. Prior to the lease signing with STG International, which will bring occupancy to 95%, the property had operated at approximately 80% occupancy for several years. The property was appraised for $45.25 million as of April 22, 2021, equal to $263/sf, which implied an LTV of 50.90% and a capitalization rate of 5.80% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.

Subject Property
NameMurrieta Spectrum
Address25125 Madison Avenue
Murrieta, CA 92562
TypeRetail
SubtypeCommunity Center
Building Size172,357 sf
Year Built2005
SubmarketTemecula
CountyRiverside
MSARiverside-San Bernardino-Ontario, CA
Origination Date08/27/2021
Loan Amount$23,000,000
Interest Rate3.73%
Valuation
Appraisal Value$45,250,000
Appraisal Date04/22/2021
Appraisal LTV50.90%
MyQ Concluded Value$37,310,000

Nanogate North America (Techniplas)

266,180 sf, Industrial, Mansfield, OH 44903

This $9.5 million loan was originated by UBS on August 20, 2021 to fund the sale-leaseback acquisition of a manufacturing facility located in Mansfield, OH. The property was acquired by MAG Capital Partners LLC and will be solely leased to its previous owner, Nanogate North America, a component manufacturing firm. The tenant was acquired by Techniplas, which is also an engineering and manufacturing company, and the property serves as the company’s only US location. The 10-year loan has an interest rate of 4.20% and requires amortizing debt service payments based on a 30-year schedule. The loan will be locked out from prepayment for 2 years, and after lockout defeasance will be permitted through the remainder of the loan term. Due to the collateral property’s location in a tertiary market, many of the loan’s comps had relatively low scores. However, two notable loans secured by single-tenant industrial properties within 50 miles of the subject included Revere Plastics, which was originated in March 2019 and has an interest rate of 4.41%, and 9040 Smith’s Mill Road, which was originated in March 2020 and has an interest rate of 3.70%.

The Techniplas manufacturing facility comprises 3 buildings set across a 23-acre parcel. The tenant signed a 20-year lease at the property that is scheduled to expire 10 years beyond loan maturity. The property was appraised for $15.25 million, equal to $57/sf, as of June 17, 2021, which implied an LTV of 62.30% and a capitalization rate of 6.33% based on the originator’s underwritten NCF. For the full valuation report and loan-level details, click here.

Subject Property
NameNanogate North America
Address150 East Longview Avenue
Mansfield, OH 44903
TypeIndustrial
SubtypeManufacturing
Building Size266,180 sf
Year Built1947
SubmarketMansfield
CountyRichland
MSAMansfield, OH
Origination Date08/20/2021
Loan Amount$9,500,000
Interest Rate4.20%
Valuation
Appraisal Value$15,250,000
Appraisal Date06/17/2021
Appraisal LTV62.30%
MyQ Concluded Value$14,750,000

Westgate Shopping Center

47,331 sf, Retail, San Antonio, TX 78216

RPD Catalyst, LLC secured a $7.2 million loan from LMF Commercial (formerly Rialto Mortgage Finance) on August 27, 2021, to refinance existing debt on a 47,331-sf neighborhood center located in San Antonio, TX. The 10-year loan has an interest rate of 4.06% and requires amortizing debt service payments based on a 30-year schedule. One of the highest scoring comps for this loan is University Square Shopping Center, which secures a loan that was originated in May 2019 and carries an interest rate of 4.35%.

Westgate Shopping Center is anchored by Guitar Center, which accounts for 71% of the property’s GLA. The anchor tenant has been severely impacted by the pandemic and recently emerged from bankruptcy in December 2020. Guitar Center’s lease expires in November 2026, which is about halfway through the loan term. The ongoing financial health of Guitar Center as well as a favorable renewal outcome at lease expiration will be the primary credit drivers for this loan. Positive news regarding Guitar Center broke in recent days after a Debtwire report indicated the company filed with the SEC to register for an IPO. The property was 100% occupied at origination and had an appraisal value of $10.4 million, equal to $219/sf, as of July 15, 2021. The appraisal implied an LTV of 69.20% and a capitalization rate of 6.80% based on the originator’s underwritten net cash flow. For the full valuation report and loan-level details, click here.

Subject Property
NameWestgate Shopping Center
Address7311 San Pedro Avenue
San Antonio, TX 78216
TypeRetail
SubtypeCommunity Center
Building Size47,331 sf
Year Built1965
SubmarketAirport
CountyBexar
MSASan Antonio, TX
Origination Date08/07/2021
Loan Amount$7,200,000
Interest Rate4.06%
Valuation
Appraisal Value$10,400,000
Appraisal Date07/15/2021
Appraisal LTV69.20%
MyQ Concluded Value$9,700,000

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. For full access to our loan database and valuation platform, sign up for a free trial below:

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Distressed Ginnie Mae Properties

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CRED iQ
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This week, CRED iQ calculated real-time valuations for 5 distressed multifamily properties that secure GNMA loans. Ginnie Mae loans secured by distressed properties as well as loans with near-term maturities are sources for intriguing opportunities within the multifamily sector that expand into several property sub-types, including seniors housing and workforce housing. Mortgage originators, distressed investors, and commercial brokers are able to search CRED iQ’s database of approximately 15,000 Ginnie Mae loans totaling $138 billion in outstanding debt for their next opportunity. The properties featured in this week’s WAR Report secure a subset of the largest distressed Ginnie Mae loans by outstanding balance that are at least 90 days delinquent.

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.

Lucas Place Lofts

130 units, Multifamily, Kansas City, MO 64105

GNMA 2015-36178M2A8

This $18.4 million loan, which is 90 days delinquent, is secured by a 130-unit multifamily loft conversion property located in Kansas City’s Garment District. The high-rise apartments were redeveloped from commercial use in 2010 and converted to loft-style units. The loan was issued through HUD’s 221(d)(4) program to facilitate the construction and rehabilitation of multifamily properties for moderate-income families, elderly, and the handicapped. The property also operates under a Chapter 353 Tax Abatement until 2023, which is an incentive for the redevelopment of blighted areas. The tax abatement was facilitated through the Missouri Department of Economic Development. Love Funding originated the loan in October 2012 and maturity is scheduled for March 2054. After the expiration of the tax abatement, property taxes for the property have potential to increase as much as 10 times the current burden. CRED iQ’s Base-Case valuation uses estimates for fully unabated property taxes. For full access to the valuation reports as well as full CMBS and GNMA loan reporting, including borrower contact information, sign up for a free trial here.

Menorah Campus Inc.

328 units, Seniors Housing, Getzville, NY 14068

GNMA 2010-3620ANWH9

This $17.4 million loan is over 120 days delinquent and is secured by a 328-unit residential care facility located about 10 miles northeast of Buffalo, NY, in close proximity to the University at Buffalo campus. The mortgage is a Section 232 loan, which facilitates the construction of assisted living facilities under the FHA’s mortgage insurance program. The loan was originated in 1991 by Berkadia Commercial Mortgage and carries a 40-year term.

The delinquency may be related to a pending sale of the property that has been held up due to pending approval by state regulators. Elderwood Administrative Services agreed to acquire the entire Weinberg Campus, which included the collateral property, in late 2017. However, the closing of the sale transaction has been delayed for several years. Prior to the announcement of the acquisition, the Menorah Campus reportedly suffered from increases in expense growth and fewer reimbursements. The property generated about $5.1 million in revenue but still had an operating loss of over $1.0 million. The sales agreement called for the entire Weinberg Campus, which includes Menorah Campus among other properties, to be acquired for $47.0 million. For full access to the valuation reports as well as full CMBS and GNMA loan reporting, including borrower contact information, sign up for a free trial here.

Oasis at 56th

124 units, Multifamily, Indianapolis, IN 46254

GNMA 2021-3617BWEF8

This $17.0 million loan is 90 days delinquent and is secured by a 124-unit assisted living facility located in suburban Indianapolis. The mortgage loan was originated in November 2017 by Walker & Dunlop and has a 40-year term. Similar to the Menorah Campus, detailed above, the Oasis at 56th property was financed through the FHA’s Section 232 program to aid in the development of assisted living facilities. The property was developed from the ground up for a cost of approximately $27.0 million and opened June 2019. Operations are managed by Gardant Management Solutions. For full access to the valuation reports as well as full CMBS and GNMA loan reporting, including borrower contact information, sign up for a free trial here.

Chatham Manufacturing Company (Mill 800 Apartments)

166 units, Multifamily, Winston-Salem, NC 27101

This $16.3 million loan, which is over 120 days delinquent, is secured by a 166-unit multifamily conversion located in Winston-Salem, NC. The property was formerly a manufacturing facility that produced a wide range of products from textiles to military equipment. The property, which now operates as Mill 800 Apartments, is the first phase of a mixed-use project that is planned to include additional office and retail space. Similar to Lucas Place Lofts, detailed above, the Mill 800 Apartments loan was issued through HUD’s 221(d)(4) program to aid development of blighted areas. The property was originally acquired in 2012. The 40-year Ginnie Mae loan was originated in 2014 and the apartments completed construction in 2016. For full access to the valuation reports as well as full CMBS and GNMA loan reporting, including borrower contact information, sign up for a free trial here.

Saucon Valley Manor Senior Living

207 units, Seniors Housing, Hellertown, PA 18055

GNMA 2012-36177YHY5

This $16.3 million loan is 90 days delinquent and is secured by a 207-unit senior living facility located about 10 miles east of Allentown, PA. The facility is part of a 5-property regional network of senior living facilities and offers multiple levels of care, including assisted living, independent living, memory care, and personal care. The property is about 147,782 sf and sits on a 2.6-acre parcel. The loan was issued through HUD’s 223(f) program and carries a 35-year term. M&T Realty Capital Corporation originated the mortgage in December 2012 and maturity is scheduled in January 2048. For full access to the valuation reports as well as full CMBS and GNMA loan reporting, including borrower contact information, sign up for a free trial here.

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. For full access to our loan database and valuation platform, sign up for a free trial below:

FREE TRIAL

Washington Prime Group Properties

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This week, CRED iQ calculated real-time valuations for 5 retail properties that are owned by Washington Prime Group (WPG), which declared bankruptcy on June 13, 2021. WPG made headlines late last week just before the beginning of Labor Day weekend when the shopping center REIT emerged from bankruptcy. A large part of the bankruptcy proceedings centered around the valuation of WPG’s assets, including its portfolio of over 100 retail properties. Many of WPG’s retail properties are encumbered by first lien mortgages that have been securitized in CMBS, including Dayton Mall and Brunswick Square, which were last featured in the August 3rd WAR Report. This week’s updated valuations aim to provide guidance for WPG properties with the highest amounts of outstanding mortgage debt.

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.

Pearlridge Center

903,692 sf, Regional Mall, Oahu, HI 96701

This $225.0 million loan ($130.4 million in senior debt and $94.6 million in subordinate debt) is secured by a combination of fee and leasehold interests in a super-regional mall complex located 9 miles outside of Honolulu, HI. Pearlridge Center is one of WPG’s most valuable properties, consisting of multiple phases. The Uptown portion of the property is anchored by Macy’s, TJ Maxx and Ross Dress for Less. The Downtown portion of the property was formerly anchored by a Sears, which is now vacant, and features a CVS as well as a movie theater. There is also an office portion of the property that consists of an 8-story building. Overall occupancy at the property remained stable at 91% throughout 2020 despite adverse impacts from the pandemic. The loan appeared on the master servicer’s watchlist during 2020 and 2021, citing the potential need for COVID-19 relief; however, the loan remained current in payment. Pearlridge Center was even able to avoid special servicing during WPG’s bankruptcy proceedings. Still, the pandemic has taken a toll on financial performance. NCF for 2020 was $19.7 million, which was a 13% decline from the prior year. The mortgage loan is scheduled to mature in June 2025. For the full valuation report and loan-level details, click here.

Waterford Lakes Town Center

691,265 sf, Power Center, Orlando, FL 32828

This $174.0 loan transferred to special servicing on March 31, 2021, which was before WPG’s bankruptcy filing. The transfer reason was cited as imminent non-monetary default and was likely affiliated with the impending bankruptcy. A forbearance agreement was signed in May 2021 that would grant WPG temporary relief from KeyBank, as special servicer, pursuing any rights and remedies related to the non-monetary default.

Waterford Lakes Town Center is one of WPG’s better positioned relative to its whole portfolio with its power center layout and location. The open-air retail center is located in Orlando, FL and is anchored by a Super Target, which does not serve as collateral for the mortgage loan. Updated servicer commentary stated the property was 96% occupied, although we anticipate elevated lease rollover risk prior to loan maturity in May 2029. The 5 largest tenants – Regal Cinemas, Best Buy, JOANN Fabrics, Bed Bath & Beyond, and Ross Dress for Less – all have lease expirations prior to loan maturity. All of these tenants, except for Bed Bath & Beyond, have a 5-year extension option. Four out of the 5-largest tenants have go-dark provisions in their lease agreements, which was a cause for concern during the early stages of the pandemic and remains a peripheral risk through loan maturity. For the full valuation report and loan-level details, click here.

Scottsdale Quarter

541,971 sf, Lifestyle Center, Scottsdale, AZ 85254

This $165.0 million loan ($95.0 million in senior debt and $70.0 million in subordinate debt) transferred to special servicing on March 22, 2021. Similar to Waterford Lakes Town Center, the transfer was affiliated with WPG’s eventual bankruptcy filing in June 2021. KeyBank, as special servicer, indicated that it would not enforce an event of default related to WPG’s bankruptcy. As part of that agreement, cash management provisions were put in place, but such provisions may be lifted now that WPG has exited bankruptcy.

The loan is secured by a mixed-use lifestyle center located in Scottsdale, AZ comprising of 66% retail and 33% office space. Primary retail tenants include Apple and Restoration Hardware. Primary office tenants include Starwood Hotels, Spaces – a coworking Regus affiliate, and Maracay Homes. WPG recently announced a positive leasing development for the retail portion of the property, stating that a lease has been signed with Landmark Theatres, which will backfill the vacant movie theater space that was formerly occupied by iPic Theaters. Notable retail tenants that have vacated since loan origination include H&M and Nike, which accounted for an aggregate 8% of the property’s GLA. CRED iQ estimates occupancy of 87% following the new lease with Landmark Theaters. For the full valuation report and loan-level details, click here.

Cottonwood Mall

410,832 sf, Regional Mall, Albuquerque, NM 87114

This $91.8 million loan transferred to special servicing on June 17, 2021 due to WPG’s bankruptcy. Unlike the previous 3 properties discussed, Cottonwood Mall is a weaker asset within WPG’s portfolio and the REIT classified the mall as a non-core asset. Updated commentary for the loan indicated WPG requested for a deed-in-lieu of foreclosure agreement with Midland Loan Services, the special servicer. Following receivership and a transfer of title, the mall would then need to be liquidated. The mortgage loan was over 90 days delinquent.

The loan is secured by 410,832 sf of in-line space at the Cottonwood Mall, which has five non-collateral anchor pads. Dillard’s (170,610 sf) and JCPenney (124,656 sf) are the two largest anchors in operation. There is also a 164,978-sf anchor pad that was formerly occupied by Macy’s but the space was backfilled by Hobby Lobby and 2 furniture stores. There is a 106,000-sf anchor pad that was formerly occupied by Sears and remains vacant. Conn’s HomePlus is the 5th non-collateral anchor with an 84,048-sf parcel. Notable collateral tenants include Regal Cinemas, Old Navy, and Ulta. For the full valuation report and loan-level details, click here.

Westminster Mall

771,844 sf, Regional Mall, Westminster, CA 92683

This $74.1 million loan is secured by 771,844 sf of a regional mall located in Orange County, CA. Westminster Mall features 4 anchor pads – Macy’s, a vacant former Sears, Target, and JCPenney. Macy’s and the vacant Sears space do not serve as collateral for the loan while Target and JCPenney own their improvements and operate pursuant to a ground lease with WPG. The mall was reported to be 88% occupied; however NCF declined sharply in 2020. The Westminster Mall generated NCF of $4.7 million during 2020, which was a 51% decline compared to origination. Despite cash flow issues, the property has a desirable location in Orange County with redevelopment potential and underlying land value.

The loan has not yet transferred to special servicer despite a below breakeven DSCR during 2020. A favorable tax appeal ruling could have potential to alleviate potential debt service coverage issues; however, the decline in NCF remains a major concern. The loan has been on the servicer’s watchlist since December 2019. For the full valuation report and loan-level details, click here.

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. For full access to our loan database and valuation platform, sign up for a free trial below:

FREE TRIAL

September 2021 Delinquency Report

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CRED iQ
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The overall delinquency rate declined for the 14th consecutive month since its peak in June 2020 and broke below 6% this month. Although the past year has shown a consistent trend in lower delinquencies, the recovery of distressed assets still has some distance before reaching pre-pandemic levels of sub-3%. Lodging and retail are still the leaders by property type with the highest individual delinquency rates; although, several hotel markets have posted delinquency declines this month including Kansas City, Los Angeles, Raleigh, and Pittsburgh. New Orleans was among the lodging markets that had the highest month-over-month increase in delinquency.

CRED iQ monitors market performance for nearly 400 MSAs across the United States. Below is a summary of the default rates for the 50 largest metros segmented by property type. For these 50 MSAs, the highest delinquency rate was in Minneapolis, followed by Louisville and New Orleans. The New Orleans market saw the largest month-over-month increase in delinquency, which allowed the MSA to surpass Cleveland amongst the regions with the highest delinquency rates. Allentown and Sacramento reported the lowest delinquency rate among the Top 50 MSAs. The most significant month over-month decline in delinquency was in the San Francisco market, which was attributed to the $1.5 billion Parkmerced loan paying current after a 30-day delinquency in July.

For the full report, download here:

The-CRED-DQ-Report-September-2021-1Download

By property type, the hotel and retail sectors remain the largest contributors to the delinquency percentages for the majority of these statistical areas. Loans backed by self-storage, multifamily, and industrial facilities posted the lowest delinquency rates for most of these markets.

MSA – Property TypeDQ/SS
(millions)		DQ/SS
(%)		Monthly
Change
Allentown-Bethlehem-Easton, PA-NJ MSA$19.40.6%0.00%
Allentown – Hotel$0.00.0%0.00%
Allentown – Industrial$0.00.0%0.00%
Allentown – Multifamily$0.00.0%0.00%
Allentown – Office$0.00.0%0.00%
Allentown – Other$0.00.0%0.00%
Allentown – Retail$19.45.1%0.00%
Allentown – Self Storage$0.00.0%0.00%
Atlanta – Atlanta-Sandy Springs-Marietta, GA MSA$749.33.1%-0.16%
Atlanta – Hotel$247.712.9%-0.01%
Atlanta – Industrial$0.00.0%0.00%
Atlanta – Multifamily$4.70.0%-0.29%
Atlanta – Office$34.01.2%0.02%
Atlanta – Other$0.00.0%0.00%
Atlanta – Retail$462.917.1%0.00%
Atlanta – Self Storage$0.00.0%0.00%
Austin – Austin-Round Rock, TX MSA$563.46.0%0.51%
Austin – Hotel$419.344.6%-0.08%
Austin – Industrial$0.00.0%0.00%
Austin – Multifamily$36.00.6%0.51%
Austin – Office$0.00.0%0.00%
Austin – Other$0.00.0%0.00%
Austin – Retail$105.615.6%3.22%
Austin – Self Storage$2.52.1%0.00%
Baltimore – Baltimore-Towson, MD MSA$448.34.6%-0.17%
Baltimore – Hotel$128.727.8%-2.92%
Baltimore – Industrial$0.00.0%0.00%
Baltimore – Multifamily$6.10.1%0.06%
Baltimore – Office$23.03.6%0.00%
Baltimore – Other$0.00.0%0.00%
Baltimore – Retail$290.626.5%0.02%
Baltimore – Self Storage$0.00.0%0.00%
Birmingham – Birmingham-Hoover, AL MSA$45.61.8%-0.10%
Birmingham – Hotel$22.721.4%0.08%
Birmingham – Industrial$0.00.0%0.00%
Birmingham – Multifamily$0.00.0%-0.19%
Birmingham – Office$0.00.0%0.00%
Birmingham – Other$0.00.0%0.00%
Birmingham – Retail$23.03.2%-0.02%
Birmingham – Self Storage$0.00.0%0.00%
Boston – Boston-Cambridge-Quincy, MA-NH MSA$367.12.1%-0.14%
Boston – Hotel$110.814.4%1.56%
Boston – Industrial$0.00.0%0.00%
Boston – Multifamily$0.00.0%0.00%
Boston – Office$0.00.0%0.00%
Boston – Other$0.00.0%0.00%
Boston – Retail$256.313.0%-1.67%
Boston – Self Storage$0.00.0%0.00%
Bridgeport – Bridgeport-Stamford-Norwalk, CT MSA$224.35.6%-1.02%
Bridgeport – Hotel$63.751.7%0.43%
Bridgeport – Industrial$17.813.6%0.71%
Bridgeport – Multifamily$0.00.0%0.00%
Bridgeport – Office$97.57.9%-3.08%
Bridgeport – Other$23.65.8%0.00%
Bridgeport – Retail$21.76.1%-0.29%
Bridgeport – Self Storage$0.00.0%0.00%
Charlotte – Charlotte-Gastonia-Concord, NC-SC MSA$352.54.4%0.06%
Charlotte – Hotel$130.010.6%1.49%
Charlotte – Industrial$0.00.0%0.00%
Charlotte – Multifamily$0.00.0%0.00%
Charlotte – Office$21.32.5%0.00%
Charlotte – Other$92.625.9%0.47%
Charlotte – Retail$108.77.9%0.10%
Charlotte – Self Storage$0.00.0%0.00%
Chicago – Chicago-Naperville-Joliet, IL-IN-WI MSA$2,067.57.8%-1.43%
Chicago – Hotel$1,121.852.6%3.00%
Chicago – Industrial$0.00.0%-0.19%
Chicago – Multifamily$134.41.4%-0.50%
Chicago – Office$386.55.4%-4.45%
Chicago – Other$117.95.9%0.13%
Chicago – Retail$306.99.1%-0.80%
Chicago – Self Storage$0.00.0%0.00%
Cincinnati – Cincinnati-Middletown, OH-KY-IN MSA$318.48.5%-0.07%
Cincinnati – Hotel$141.246.3%0.00%
Cincinnati – Industrial$0.00.0%0.00%
Cincinnati – Multifamily$1.60.1%-0.04%
Cincinnati – Office$11.52.3%-0.11%
Cincinnati – Other$15.75.0%-0.07%
Cincinnati – Retail$147.420.9%0.19%
Cincinnati – Self Storage$1.01.6%0.00%
Cleveland – Cleveland-Elyria-Mentor, OH MSA$596.914.3%0.02%
Cleveland – Hotel$135.459.0%-0.04%
Cleveland – Industrial$0.00.0%0.00%
Cleveland – Multifamily$0.00.0%-0.37%
Cleveland – Office$105.312.6%-0.01%
Cleveland – Other$173.540.3%3.69%
Cleveland – Retail$182.620.6%-0.04%
Cleveland – Self Storage$0.00.0%0.00%
Columbus, OH – Columbus, OH MSA$251.84.2%-0.16%
Columbus, OH – Hotel$84.626.8%0.30%
Columbus, OH – Industrial$11.92.8%-0.01%
Columbus, OH – Multifamily$4.30.1%-0.27%
Columbus, OH – Office$12.52.4%0.00%
Columbus, OH – Other$0.00.0%0.00%
Columbus, OH – Retail$128.015.0%0.10%
Columbus, OH – Self Storage$10.417.9%0.03%
Dallas – Dallas-Fort Worth-Arlington, TX MSA$1,040.53.1%0.03%
Dallas – Hotel$443.812.3%-0.42%
Dallas – Industrial$1.70.1%0.00%
Dallas – Multifamily$47.70.2%-0.01%
Dallas – Office$212.15.6%1.06%
Dallas – Other$23.91.4%-0.20%
Dallas – Retail$300.111.9%0.34%
Dallas – Self Storage$11.22.2%0.11%
Denver – Denver-Aurora, CO MSA$334.82.0%-0.31%
Denver – Hotel$43.45.0%-3.39%
Denver – Industrial$0.00.0%0.00%
Denver – Multifamily$0.00.0%-0.03%
Denver – Office$194.49.3%-0.90%
Denver – Other$7.01.2%0.06%
Denver – Retail$87.05.7%-0.15%
Denver – Self Storage$3.11.8%0.00%
Detroit – Detroit-Warren-Livonia, MI MSA$608.26.8%0.19%
Detroit – Hotel$316.741.6%0.05%
Detroit – Industrial$45.98.5%1.05%
Detroit – Multifamily$42.51.3%0.20%
Detroit – Office$6.60.4%0.40%
Detroit – Other$22.53.4%0.06%
Detroit – Retail$174.110.1%-0.10%
Detroit – Self Storage$0.00.0%0.00%
Hartford – Hartford-West Hartford-East Hartford, CT MSA$212.18.6%-0.64%
Hartford – Hotel$89.260.6%-3.65%
Hartford – Industrial$0.00.0%0.00%
Hartford – Multifamily$3.90.3%-0.55%
Hartford – Office$87.622.2%0.02%
Hartford – Other$1.20.6%0.01%
Hartford – Retail$30.312.6%-0.42%
Hartford – Self Storage$0.00.0%0.00%
Houston – Houston-Sugar Land-Baytown, TX MSA$1,485.55.3%-0.90%
Houston – Hotel$705.759.6%-0.33%
Houston – Industrial$10.91.6%0.07%
Houston – Multifamily$80.80.6%-0.32%
Houston – Office$528.213.5%-0.78%
Houston – Other$33.90.9%-2.97%
Houston – Retail$97.92.6%-0.20%
Houston – Self Storage$28.25.8%0.18%
Indianapolis – Indianapolis-Carmel, IN MSA$386.28.0%-1.03%
Indianapolis – Hotel$169.226.6%0.01%
Indianapolis – Industrial$0.00.0%0.00%
Indianapolis – Multifamily$97.24.5%-0.51%
Indianapolis – Office$67.810.6%-0.60%
Indianapolis – Other$9.84.6%-0.15%
Indianapolis – Retail$38.27.0%-2.15%
Indianapolis – Self Storage$4.05.2%0.00%
Jacksonville – Jacksonville, FL MSA$67.61.3%-0.25%
Jacksonville – Hotel$38.68.9%-2.20%
Jacksonville – Industrial$0.00.0%0.00%
Jacksonville – Multifamily$20.00.6%-0.09%
Jacksonville – Office$0.00.0%0.00%
Jacksonville – Other$0.00.0%0.00%
Jacksonville – Retail$9.12.1%0.00%
Jacksonville – Self Storage$0.00.0%0.00%
Kansas City – Kansas City, MO-KS MSA$163.23.5%-4.66%
Kansas City – Hotel$97.931.1%-16.55%
Kansas City – Industrial$0.00.0%0.00%
Kansas City – Multifamily$7.60.3%-0.01%
Kansas City – Office$0.00.0%-18.21%
Kansas City – Other$2.81.2%-0.88%
Kansas City – Retail$53.38.2%2.39%
Kansas City – Self Storage$1.60.8%0.00%
Las Vegas – Las Vegas-Paradise, NV MSA$393.82.0%-0.34%
Las Vegas – Hotel$18.30.3%0.00%
Las Vegas – Industrial$0.00.0%0.00%
Las Vegas – Multifamily$0.00.0%0.00%
Las Vegas – Office$10.21.7%0.06%
Las Vegas – Other$0.00.0%0.00%
Las Vegas – Retail$362.67.5%-1.43%
Las Vegas – Self Storage$2.61.4%0.05%
Los Angeles – Los Angeles-Long Beach-Santa Ana, CA MSA$1,997.44.1%-0.89%
Los Angeles – Hotel$647.415.8%-9.11%
Los Angeles – Industrial$2.00.2%0.00%
Los Angeles – Multifamily$133.50.6%0.02%
Los Angeles – Office$368.73.1%0.00%
Los Angeles – Other$197.76.5%-1.56%
Los Angeles – Retail$644.69.4%0.13%
Los Angeles – Self Storage$3.50.4%0.36%
Louisville – Louisville/Jefferson County, KY-IN MSA$632.820.4%0.09%
Louisville – Hotel$243.054.2%0.03%
Louisville – Industrial$0.00.0%0.00%
Louisville – Multifamily$3.80.3%0.00%
Louisville – Office$0.00.0%0.00%
Louisville – Other$0.00.0%0.00%
Louisville – Retail$386.159.1%0.14%
Louisville – Self Storage$0.00.0%0.00%
Memphis – Memphis, TN-AR-MS MSA$156.86.5%-1.90%
Memphis – Hotel$56.327.5%0.20%
Memphis – Industrial$0.00.0%0.00%
Memphis – Multifamily$17.81.7%-0.66%
Memphis – Office$0.00.0%-11.38%
Memphis – Other$18.433.7%1.83%
Memphis – Retail$62.715.3%0.05%
Memphis – Self Storage$1.61.0%0.00%
Miami – Miami-Fort Lauderdale-Pompano Beach, FL MSA$843.23.9%-0.76%
Miami – Hotel$375.78.2%0.04%
Miami – Industrial$0.00.0%0.00%
Miami – Multifamily$5.80.1%-0.04%
Miami – Office$21.71.1%-2.68%
Miami – Other$8.70.6%-4.20%
Miami – Retail$431.48.9%-0.72%
Miami – Self Storage$0.00.0%0.00%
Milwaukee – Milwaukee-Waukesha-West Allis, WI MSA$255.410.5%-0.09%
Milwaukee – Hotel$35.723.1%-0.01%
Milwaukee – Industrial$0.00.0%0.00%
Milwaukee – Multifamily$0.00.0%0.00%
Milwaukee – Office$66.411.6%0.00%
Milwaukee – Other$0.00.0%0.00%
Milwaukee – Retail$153.230.5%0.23%
Milwaukee – Self Storage$0.00.0%0.00%
Minneapolis – Minneapolis-St. Paul-Bloomington, MN-WI MSA$1,932.323.3%-2.99%
Minneapolis – Hotel$332.552.6%0.29%
Minneapolis – Industrial$4.11.5%-3.88%
Minneapolis – Multifamily$0.00.0%0.00%
Minneapolis – Office$152.47.4%-12.26%
Minneapolis – Other$11.73.0%0.17%
Minneapolis – Retail$1,431.870.6%0.78%
Minneapolis – Self Storage$0.00.0%0.00%
Nashville – Nashville-Davidson-Murfreesboro-Franklin, TN MSA$351.45.6%-0.28%
Nashville – Hotel$339.224.8%-1.11%
Nashville – Industrial$0.00.0%0.00%
Nashville – Multifamily$0.00.0%0.00%
Nashville – Office$0.00.0%0.00%
Nashville – Other$0.00.0%0.00%
Nashville – Retail$12.11.6%-0.01%
Nashville – Self Storage$0.00.0%0.00%
New Orleans – New Orleans-Metairie-Kenner, LA MSA$487.414.3%1.09%
New Orleans – Hotel$451.140.4%1.91%
New Orleans – Industrial$0.00.0%0.00%
New Orleans – Multifamily$13.41.7%0.00%
New Orleans – Office$0.00.0%0.00%
New Orleans – Other$0.00.0%0.00%
New Orleans – Retail$22.92.9%-0.01%
New Orleans – Self Storage$0.00.0%0.00%
New York City – New York-Northern New Jersey-Long Island, NY-NJ-PA MSA$6,718.55.7%0.15%
New York City – Hotel$1,860.049.8%-0.30%
New York City – Industrial$7.50.5%0.03%
New York City – Multifamily$523.91.6%0.12%
New York City – Office$734.61.7%-0.11%
New York City – Other$1,636.67.8%0.06%
New York City – Retail$1,955.913.8%-0.32%
New York City – Self Storage$0.00.0%0.00%
Orlando – Orlando-Kissimmee, FL MSA$476.84.1%-0.58%
Orlando – Hotel$186.56.5%-1.87%
Orlando – Industrial$0.00.0%0.00%
Orlando – Multifamily$25.50.4%0.01%
Orlando – Office$47.19.6%0.01%
Orlando – Other$0.00.0%0.00%
Orlando – Retail$217.720.5%-1.95%
Orlando – Self Storage$0.00.0%0.00%
Philadelphia – Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA$991.35.3%0.05%
Philadelphia – Hotel$380.340.9%9.17%
Philadelphia – Industrial$0.00.0%0.00%
Philadelphia – Multifamily$118.61.3%0.00%
Philadelphia – Office$51.11.2%0.10%
Philadelphia – Other$79.35.7%-0.15%
Philadelphia – Retail$362.014.2%0.03%
Philadelphia – Self Storage$0.00.0%0.00%
Phoenix – Phoenix-Mesa-Scottsdale, AZ MSA$594.73.1%-0.38%
Phoenix – Hotel$80.54.8%-1.17%
Phoenix – Industrial$10.21.9%-0.02%
Phoenix – Multifamily$0.00.0%0.00%
Phoenix – Office$23.81.1%-2.13%
Phoenix – Other$180.524.1%0.42%
Phoenix – Retail$299.77.5%-0.11%
Phoenix – Self Storage$0.00.0%0.00%
Pittsburgh – Pittsburgh, PA MSA$202.54.3%-0.51%
Pittsburgh – Hotel$125.342.9%-5.99%
Pittsburgh – Industrial$0.00.0%0.00%
Pittsburgh – Multifamily$0.00.0%0.00%
Pittsburgh – Office$15.41.7%0.00%
Pittsburgh – Other$8.12.1%0.09%
Pittsburgh – Retail$53.67.3%0.11%
Pittsburgh – Self Storage$0.00.0%0.00%
Portland – Portland-Vancouver-Beaverton, OR-WA MSA$532.78.2%-0.74%
Portland – Hotel$520.959.2%-6.07%
Portland – Industrial$0.00.0%0.00%
Portland – Multifamily$10.20.2%0.00%
Portland – Office$1.60.5%0.00%
Portland – Other$0.00.0%0.00%
Portland – Retail$0.00.0%0.00%
Portland – Self Storage$0.00.0%0.00%
Raleigh – Raleigh-Cary, NC MSA$135.23.3%-0.92%
Raleigh – Hotel$86.619.2%-7.70%
Raleigh – Industrial$0.00.0%0.00%
Raleigh – Multifamily$0.00.0%0.00%
Raleigh – Office$12.74.0%0.00%
Raleigh – Other$0.00.0%0.00%
Raleigh – Retail$35.88.1%-1.24%
Raleigh – Self Storage$0.00.0%0.00%
Richmond – Richmond, VA MSA$142.04.1%-0.22%
Richmond – Hotel$50.617.8%0.29%
Richmond – Industrial$6.94.9%-0.12%
Richmond – Multifamily$0.00.0%-0.56%
Richmond – Office$0.00.0%0.00%
Richmond – Other$0.00.0%0.00%
Richmond – Retail$84.415.3%0.06%
Richmond – Self Storage$0.00.0%0.00%
Riverside – Riverside-San Bernardino-Ontario, CA MSA$393.94.2%-0.36%
Riverside – Hotel$85.017.1%-1.92%
Riverside – Industrial$0.00.0%0.00%
Riverside – Multifamily$2.40.1%-0.08%
Riverside – Office$0.00.0%0.00%
Riverside – Other$0.00.0%0.00%
Riverside – Retail$306.513.9%0.31%
Riverside – Self Storage$0.00.0%0.00%
Sacramento – Sacramento-Arden-Arcade-Roseville, CA MSA$31.00.6%0.00%
Sacramento – Hotel$6.31.7%0.00%
Sacramento – Industrial$0.00.0%0.00%
Sacramento – Multifamily$0.00.0%0.00%
Sacramento – Office$11.01.9%0.93%
Sacramento – Other$0.00.0%0.00%
Sacramento – Retail$13.81.8%-0.57%
Sacramento – Self Storage$0.00.0%0.00%
Salt Lake City – Salt Lake City, UT MSA$187.05.1%-0.25%
Salt Lake City – Hotel$47.615.3%-0.01%
Salt Lake City – Industrial$0.00.0%0.00%
Salt Lake City – Multifamily$0.00.0%0.00%
Salt Lake City – Office$0.00.0%-1.85%
Salt Lake City – Other$0.00.0%0.00%
Salt Lake City – Retail$139.429.9%0.07%
Salt Lake City – Self Storage$0.00.0%0.00%
San Antonio – San Antonio, TX MSA$201.83.1%0.00%
San Antonio – Hotel$26.27.8%0.29%
San Antonio – Industrial$0.00.0%0.00%
San Antonio – Multifamily$8.20.2%-0.01%
San Antonio – Office$0.00.0%-1.44%
San Antonio – Other$0.40.2%-0.24%
San Antonio – Retail$165.618.8%1.61%
San Antonio – Self Storage$1.40.9%0.00%
San Diego – San Diego-Carlsbad-San Marcos, CA MSA$231.22.1%-4.03%
San Diego – Hotel$79.53.7%-21.11%
San Diego – Industrial$0.00.0%0.00%
San Diego – Multifamily$9.60.2%0.01%
San Diego – Office$0.00.0%0.00%
San Diego – Other$20.83.3%0.01%
San Diego – Retail$121.310.3%0.19%
San Diego – Self Storage$0.00.0%0.00%
San Francisco – San Francisco-Oakland-Fremont, CA MSA$331.91.5%-5.76%
San Francisco – Hotel$212.19.0%0.37%
San Francisco – Industrial$0.00.0%0.00%
San Francisco – Multifamily$22.60.3%-17.77%
San Francisco – Office$18.90.2%-0.10%
San Francisco – Other$30.61.7%0.01%
San Francisco – Retail$47.83.6%-0.02%
San Francisco – Self Storage$0.00.0%0.00%
San Jose – San Jose-Sunnyvale-Santa Clara, CA MSA$171.11.2%0.00%
San Jose – Hotel$156.47.7%0.13%
San Jose – Industrial$0.00.0%0.00%
San Jose – Multifamily$0.00.0%0.00%
San Jose – Office$14.70.2%0.00%
San Jose – Other$0.00.0%0.00%
San Jose – Retail$0.00.0%0.00%
San Jose – Self Storage$0.00.0%0.00%
Seattle – Seattle-Tacoma-Bellevue, WA MSA$245.01.4%-0.30%
Seattle – Hotel$238.218.0%-2.61%
Seattle – Industrial$0.00.0%0.00%
Seattle – Multifamily$0.00.0%0.00%
Seattle – Office$0.00.0%0.00%
Seattle – Other$0.00.0%0.00%
Seattle – Retail$6.80.4%0.01%
Seattle – Self Storage$0.00.0%-2.41%
St. Louis – St. Louis, MO-IL MSA$420.39.6%-0.07%
St. Louis – Hotel$58.620.6%0.04%
St. Louis – Industrial$0.00.0%0.00%
St. Louis – Multifamily$23.41.4%0.00%
St. Louis – Office$107.619.1%0.02%
St. Louis – Other$24.74.9%-0.01%
St. Louis – Retail$206.020.1%-0.18%
St. Louis – Self Storage$0.00.0%0.00%
Tampa – Tampa-St. Petersburg-Clearwater, FL$386.33.9%-0.31%
Tampa – Hotel$74.96.3%0.00%
Tampa – Industrial$0.00.0%0.00%
Tampa – Multifamily$34.70.6%-0.06%
Tampa – Office$24.14.1%0.00%
Tampa – Other$0.00.0%0.00%
Tampa – Retail$252.618.8%-1.76%
Tampa – Self Storage$0.00.0%0.00%
Tucson – Tucson, AZ MSA$267.47.5%0.04%
Tucson – Hotel$1.40.4%0.00%
Tucson – Industrial$0.00.0%0.00%
Tucson – Multifamily$0.00.0%0.00%
Tucson – Office$0.00.0%0.00%
Tucson – Other$0.00.0%0.00%
Tucson – Retail$266.018.6%0.34%
Tucson – Self Storage$0.00.0%0.00%
Virginia Beach – Virginia Beach-Norfolk-Newport News, VA-NC MSA$254.35.8%-0.13%
Virginia Beach – Hotel$24.75.3%-2.98%
Virginia Beach – Industrial$21.213.1%-0.01%
Virginia Beach – Multifamily$0.00.0%0.00%
Virginia Beach – Office$12.63.1%-0.02%
Virginia Beach – Other$0.00.0%0.00%
Virginia Beach – Retail$187.120.6%1.08%
Virginia Beach – Self Storage$8.89.9%0.31%
Washington – Washington-Arlington-Alexandria, DC-VA-MD-WV MSA$986.83.5%0.14%
Washington – Hotel$59.25.3%-0.65%
Washington – Industrial$0.00.0%0.00%
Washington – Multifamily$1.30.0%-0.02%
Washington – Office$508.68.0%0.79%
Washington – Other$249.712.4%0.45%
Washington – Retail$168.15.4%-0.01%
Washington – Self Storage$0.00.0%0.00%
Grand Total – Top 50 MSAs$31,254.94.7%-0.59%
Source: CRED iQ

REO Regional Malls

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CRED iQ
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This week, CRED iQ calculated real-time valuations for 5 regional malls that have had title transfers in the past year and are now REO. The updated valuations serve as a follow-up to our August 18 blog – CRED iQ in the News – Regional Mall Distress. The featured assets are the 5 largest malls, by outstanding debt, that have become REO since the onset of the pandemic. One of the featured properties, Oakdale Mall, reportedly has secured a buyer with major redevelopment plants. Check out the commentary below for more detail! 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.

Town Center at Cobb

559,940 sf, Regional Mall, Kennesaw, GA 30144

This property, which has outstanding debt of $172.5 million, has been with the special servicer since June 2020. Title to the property transferred to KeyBank, as special servicer, from Simon Property Group in January 2021 via foreclosure. KeyBank appears to still be in the process of assessing the timeline for liquidation, although March 2022 was provided as an estimated resolution date.

The Town Center at Cobb, located approximately 25 miles northwest of Atlanta, features 5 anchor pads that include 2 separate Macy’s boxes, a vacant former Sears box, a JCPenney, and a Belk. The REO portion of the property only includes the ground and improvements for the 128,819-sf Belk parcel as the other 4 pads did not secure the mortgage debt. Additionally, Belk has a near-term lease expiration in August 2022. An updated appraisal of $130.4 million ($233/sf) was reported last August and was equal to a 60% decline in value since the mortgage loan was originated. CRED-iQ’s Base-Case Valuation calculates a lower figure given uncertainty regarding Belk’s lease renewal and continued occupancy declines. For the full valuation report and loan-level details, click here.

Florence Mall

384,111 sf, Regional Mall, Florence, KY 41042

This property, which has outstanding debt of $89.4 million, has been with the special servicer since July 2020. Florence Mall, located in the suburbs of Cincinnati, OH, was formerly owned by Brookfield Property Partners but the firm agreed to a deed-in-lieu of foreclosure agreement with KeyBank in January 2021. The REO portion of the property solely consists of in-line space and a 68,324-sf movie theater outparcel. A vacant former Sears box, 2 separate Macy’s boxes, and a JCPenney make up the non-collateral anchor mix.

Updated servicer commentary stated the property was 82% occupied. The last full-year financials for the property indicated a DSCR of 2.16 for 2019, which is a prime example of the acceleration of credit deterioration brought on by the pandemic in the form of tenant departures, rent collection issues, and reduced foot traffic. JLL has been put in place to manage the property until the mall can be put to market for a liquidation sale. For the full valuation report and loan-level details, click here.

Southland Mall

660,736 sf, Regional Mall, Cutler Bay, FL 33189

This property, which has outstanding debt of $65.2 million, has been with the special servicer since April 2020. KeyBank, as special servicer, pursued foreclosure on the mall and acquired title to the property in March 2021. Southland Mall is located about 20 miles south of Miami and features 4 anchor parcels: a vacant former Sears, Macy’s, JCPenney, and Regal Cinemas. Sears and Macy’s are owned by separate entities and are not part of the REO collateral. However, the REO title vesting includes a 148,841-sf freestanding retail strip located to the north of the mall that is leased to a 28,450-sf Ross Dress for Less and was leased to a former K-Mart, which is now partly occupied by a church.

Prior to the mall’s foreclosure, it was encumbered by floating-rate mortgage debt as well as $41.0 million in mezzanine debt, which equated to a 91% LTV based on cumulative debt at origination. Prospective buyers will likely be concerned with lease rollover risk at the property as leases for the three-largest tenants, accounting for 28% of the GLA, are scheduled to expire in 2022. For the full valuation report and loan-level details, click here.

Newgate Mall

497,962 sf, Regional Mall, Ogden, UT 84405

This property, which has outstanding debt of $58.0 million, has been with the special servicer since March 2020. Rialto foreclosed on the property and acquired title from Time Equities Inc. in March 2021. The mall is now managed by The Woodmont Company and the sale of the asset is targeted for early-2022. The Newgate Mall, located 35 miles north of Salt Lake City, has 3 anchor pads consisting of a 149,624-sf vacant former Sears, Dillard’s, and a Burlington Coat Factory. Dillard’s and Burlington are owned by separate entities and are not part of the REO offering. The Burlington space has turned over several times in recent history, with the box previously occupied by GlowGolf and Mervyn’s prior to that. The REO portion of the property also includes a 61,970-sf junior anchor Cinemark movie theater and a DownEast Home & Clothing, which backfilled a former Sports Authority. For the full valuation report and loan-level details, click here.

Oakdale Mall

708,695 sf, Regional Mall, Johnson City, NY 13790

This property, which has outstanding debt of $47.5 million, has been with the special servicer since June 2018. Rialto acquired title to the property from Interstate Properties through a deed-in-lieu of foreclosure agreement in September 2020. The mall had been severely distressed pre-COVID when the mortgage loan had a below breakeven DSCR in 2018 and 2019. Positive developments for the mall came to fruition in recent weeks in the form of a 25-year payment-in-lieu-of-taxes (PILOT) program that would reduce real estate tax expense for the property from approximately $3.5 million to $449,000 for the next 5 years before scaling back up to $1.1 million in year 25. The PILOT agreement is in conjunction with a potential sale to Spark JC LLC, a local developer that acquired the vacant Sears portion of the mall in 2019. SPARK JC LLC plans to convert the former Sears box into a hospital and social services center.

The development firm also reportedly negotiated a $6.5 million settlement with Rialto for a tax lawsuit and is finalizing the acquisition of the property for approximately $8.5 million ($12/sf). In total, the redevelopment project is estimated to cost $116.0 million with plans convert the Oakdale Mall into a diversified mixed-use project named Oakdale Commons. For additional details, full valuation report, and loan-level details, click here.

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. For full access to our loan database and valuation platform, sign up for a free trial below:

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Top Markets for Distressed Hotel Opportunities

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This week, CRED iQ leveraged our data platform to analyze 5 primary lodging markets with the highest volume of distressed loans secured by hotels. Within each market, we highlighted opportunities where the potential for pricing dislocation may be present. These are loans that have transferred to special servicing but have not received an updated appraisal or BOV in the past 12 months. Updated valuations for these properties are likely dislocated from appraisal values at origination and may be lower, in many cases, given past deterioration in financial performance. CRED iQ valuations factor in a base-case (Most Likely), a downside (significant disruption of occupancy), and dark scenarios (permanent or temporary operational shutdown). 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.

In our August 2021 CRED DQ Report, we highlighted delinquent and specially serviced loans by MSA and Property Type. With hotel as the worst performing property type, we focused on 5 of the Top 50 MSAs that had the highest amount of distressed debt by outstanding loan balance. New York, Chicago, Los Angeles, Houston, and Portland were the leading markets for distressed hotel debt. Three of the markets, New York, Chicago and LA, each had over $1 billion in distressed debt. Although Houston and Portland rounded out the list of 5 markets, both MSAs are Top 3 in highest percentage of delinquent and specially serviced loans. We take a closer look at each market below.

New York

The New York-Northern New Jersey-Long Island, NY-NJ-PA MSA has approximately $1.87 billion in distressed CMBS debt secured by lodging properties, accounting for just about half of all outstanding debt in the market by outstanding balance. New York, and Manhattan especially, has experienced deep and longstanding effects from the pandemic and ongoing headwinds from the Delta variant have continued to preclude a predictable and timely recovery. A recent example of asset repricing is Royalton Park Avenue (fka Gansevoort Park Avenue), which was featured in the July 14, 2021 WAR Report. The mortgage loan secured by the hotel has since been modified and an updated June 2021 appraisal of $98.2 million represented a 65% decline in value since origination in 2012. Below is a snapshot of some other distressed lodging loans that may also be due for updated valuations:

Property NameAddressOutstanding Balance
(millions)		DQ StatusCRED iQ Base-Case Value
(millions)		Most Recent Appraisal
(millions)		Most Recent
Appraisal Date
The Standard Highline NYC848 Washington St
New York, NY 10014		$170.090+ Days$151.0$241.09/30/2020
Hilton Garden Inn W 54th Street237 W 54th St
New York, NY 10019		$155.0Current$177.0$251.011/24/2014
Holiday Inn FiDi99 Washington St
New York, NY 10006		$87.0121+ Days$91.3$233.07/26/2018
Hilton Times Square*234 W 42nd St
New York, NY 10036		$75.6REO$50.9$246.010/13/2010
Hilton Long Island Huntington598 Broad Hollow Rd
Melville, NY 11747		$33.330+ Days$40.1$52.35/11/2016
* The property comprises a leasehold interest in the 460-key hotel and operates pursuant to a ground lease that is due for a reset. The Base-Case Valuation assumes stabilized operations with an estimated increase in ground rent. However, an unfavorable outcome from the results of negotiations with the ground lessor could result in a nominal value or reversion of the property to the ground lessor.

Source: CRED iQ

Chicago

The Chicago-Naperville-Joliet, IL-IN-WI MSA has approximately $1.1 billion in distressed CMBS debt secured by lodging properties, accounting for just under 50% of total outstanding debt in the market. The Chicago lodging market was hampered by oversupply issues pre-pandemic and the onset of COVID-19 exacerbated poor financial performance for a good portion of inventory. Below is a list of 5 specially serviced assets located in the Chicago MSA that have not yet reported updated appraisals. Three of the properties are located in Schaumburg, IL, indicating that the market’s distress is not solely isolated to the CBD.

Property NameAddressOutstanding Balance
(millions)		DQ StatusCRED iQ Base-Case Value
(millions)		Most Recent Appraisal
(millions)		Most Recent Appraisal Date
Residence Inn Schaumburg1610 McConnor Pkwy
Schaumburg, IL 60173		$14.5Current$14.8$18.010/1/2017
Courtyard Schaumburg1311 American Ln
Schaumburg, IL 60173		$13.8Current$14.4$17.210/1/2017
Springhill Suites Schaumburg1550 McConnor Pkwy
Schaumburg, IL 60172		$9.6Current$9.2$11.910/1/2017
Best Western O’Hare10300 W Higgins Rd
Rosemont, IL 60018		$8.9121+ Days$8.2$8.79/11/2020
Holiday Inn – Chicago2424 W Sullivan Rd
Aurora, IL 60506		$5.3121+ Days$4.0$3.38/27/2020
Source: CRED iQ

Los Angeles

The Los Angeles-Long Beach-Santa Ana, CA MSA has approximately $1.05 billion in distressed lodging CMBS debt; however, this accounts for only about 25% of total outstanding debt in the market, which is the lowest percentage of the 5 markets that are featured. There are 5 distressed assets presented below that have transferred to special servicing but have not yet reported updated appraisals. Despite the relatively high balance of distressed debt in the market, Los Angeles has been one of the more active markets where commercial real estate investors have been finding opportunities. Several notable lodging assets have been sold so far in 2021, including the two properties located in Orange, CA in the list below. Both of the mortgage loans were assumed in conjunction with the sales.

Property NameAddressOutstanding Balance
(millions)		DQ StatusCRED iQ Base-Case Value
(millions)		Most Recent Appraisal (millions)Most Recent Appraisal Date
Courtyard Los Angeles Sherman Oaks15433 Ventura Blvd
Sherman Oaks, CA 91403		$54.5121+ Days$51.1$48.78/8/2020
DoubleTree Anaheim – Orange County100 The City Drive S
Orange, CA 92868		$45.1121+ Days$68.6$64.18/20/2020
Embassy Suites – Brea900 E Birch St
Brea, CA 92821		$37.4121+ Days$53.2$53.011/17/2020
Portofino Inn & Suites – Anaheim CA1831 S Harbor Blvd
Anaheim, CA 92802		$36.8REO$30.1$34.54/25/2018
Embassy Suites Anaheim Orange400 N State College Blvd
Orange, CA 92868		$33.0Current$48.5$58.74/1/2018
Source: CRED iQ

Houston

The Houston-Sugar Land-Baytown, TX MSA has approximately $715.9 million in distressed lodging CMBS debt, accounting for nearly 60% of total outstanding lodging debt in the market. Similar to Chicago, a portion of Houston’s distressed lodging inventory was in existence pre-pandemic. In contrast, many submarkets in Houston, such as Westchase and the Energy Corridor, were impacted by volatility in the oil and gas industries and ongoing operational repercussions have lingered. A snapshot of distressed lodging properties in the Houston market is shown below.

Property NameAddressOutstanding Balance
(millions)		DQ StatusCRED iQ Base-Case Value
(millions)		Most Recent Appraisal
(millions)		Most Recent Appraisal Date
Hilton Houston Westchase9999 Westheimer Road
Houston, TX 77042		$42.1Maturity Default$17.8$22.25/20/2020
Marriott Galleria1750 W Loop S
Houston, TX 77027		$29.8REO$21.1$21.09/17/2020
Hilton Garden Inn Houston7979 Willow Chase Blvd
Houston, TX 77070		$18.4REO$8.9$12.59/10/2020
Courtyard Galveston9550 Seawall Blvd
Galveston, TX 77554		$7.3REO$9.2$7.99/18/2020
Holiday Inn Houston SW Sugar Land11160 Southwest Fwy
Houston, TX 77031		$7.3121+ Days$5.0$9.57/23/2020
Source: CRED iQ

Portland

The Portland-Vancouver-Beaverton, OR-WA MSA has approximately $537.1 million in distressed CMBS debt secured by hotels. Portland had the second highest rate of lodging distress among CRED iQ’s Top 50 markets, with 61% of loans secured by hotels that are either specially serviced or delinquent. There are 3 assets, listed below, located in the Portland MSA that are distressed but have not received updated appraisals for about a year.


Property Name		AddressOutstanding Balance
(millions)		DQ StatusCRED iQ Base-Case Value
(millions)		Most Recent Appraisal
(millions)		Most Recent Appraisal Date
Embassy Suites – Hillsboro20001 NW Tanasbourne Dr
Hillsboro, OR 97124		$30.1Current$21.2$33.09/18/2020
Hotel deLuxe729 SW 15th Avenue
Portland, OR 97205		$29.2121+ Days$28.3$33.09/1/2020
Comfort Inn and Suites – McMinnville2520 SE Stratus Ave
McMinnville, OR 97128		$4.1Current$6.7$7.77/28/2020
Source: CRED iQ

CRED iQ is a commercial real estate data, analytics, and valuation platform providing actionable intelligence to CRE and capital markets investors. Subscribers to CRED iQ use the platform to identify valuable leads for leasing, lending, refinancing, distressed debt, and acquisition opportunities. For full access to our loan database and valuation platform, sign up for a free trial below:

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CRED iQ in the News – Regional Mall Distress

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A great article was published on MarketWatch this week by @JoyWiltermuth profiling buyers of distressed regional malls across the country. For those of our followers that missed the story, here is a link to the article. CRED iQ had the pleasure of providing data for regional malls that have become distressed to the level that the owners have or are willing to transition titles to the properties back to lenders. This group of assets includes malls that have become REO since the pandemic, malls that have entered receivership, malls in negotiation for deed-in-lieu of foreclosure agreements, and malls where foreclosure is likely in the near term.

Here is a list of the 5 largest malls that have become REO since the onset of the pandemic:

REO Title Acquisitions Since April 2020 – Regional Malls

Property NameLocationOutstanding Debt
Town Center at CobbKennesaw, GA$173,449,158
Florence MallFlorence, KY$89,404,415
Southland MallCutler Bay, FL$65,159,858
Newgate MallOgden, UT$58,000,000
Oakdale MallJohnson City, NY$47,464,494

More additions to the list are likely to occur over the next 12 to 18 months as foreclosures and deed-in-lieu agreements continue to be consummated. Here is a sample list of some of the largest loans that are on the path to foreclosure and subsequent title transfer:

Likely Near Term REO Title Transfers – Regional Malls

Property NameLocationOutstanding Debt
Mall St. MatthewsLouisville, KY$164,710,290
Park Place MallTucson, AZ$164,332,652
Westfield Citrus ParkTampa, FL$123,939,920
Ingram Park MallSan Antonio, TX$120,157,888
Mall at Tuttle CrossingDublin, OH$111,961,149

To explore the data more in depth, click here.

Recent Commercial Mortgage Originations

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This week, CRED iQ took the opportunity to highlight newly originated commercial real estate loans and calculated real-time valuations for 5 properties that have secured financing in recent months. Our data and analysis indicate these loans have relatively elevated levels of credit risk compared to others originated so far in 2021. 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.

Mi Place at Vineyard

288 units, Multifamily, Lewes, DE 19958

A $49.0 million financing package was funded by Morgan Stanley on July 13, 2021. The debt stack consisted of a $44.0 million first mortgage loan and $5.0 million in mezzanine debt. The financing package was used to pay off $39.2 million in existing debt and return $8.2 million in equity to the borrower sponsor, Jeffrey Fernbach, founder of Fernmoor Homes. The mortgage loan has a 10-year term and requires interest-only debt service payments with an interest rate of 4.37%. The mezzanine loan is coterminous with the senior mortgage and requires interest-only payments with rate of 9.25%. The mezzanine loan appears to have been sold to a third party, while the senior debt was securitized in a CMBS transaction.

The mortgage loan is secured by a leasehold interest in several multifamily and commercial condominium units located in Lewes, DE, about 8 miles inland of the Atlantic Ocean and Delaware’s coastline. The property contains 288 apartment units and an additional 21 units for commercial use. The collateral operates pursuant to a ground lease that required a payment of $992,805 in 2021. The ground lease expires in 2102 and annual payment is calculated based on formulas that account for a percentage of apartment rents for certain units and a flat cost per size for other units, with increases based on the consumer price index. The property was appraised for $64.1 million, equal to $222,569/unit, in March 2021; although CRED iQ’s analysis suggests a slightly lower value, accounting for credit risks associated with property’s leasehold ownership interest and certain elements of the condominium structure. For the full valuation report and loan-level details, click here.

Subject Property
NameMi Place at Vineyard
Address12001 Old Vine Boulevard
Lewes, Delaware 19958
TypeMultifamily
SubtypeGarden
Building Size288 units
Year Built2012
SubmarketLewes
CountySussex County
MSANon-Metropolitan Area – DE
Origination Date07/13/2021
Valuation
Appraisal Value$64,100,000
Appraisal Date03/16/2021
MyQ Concluded Value $60,450,000

Crescent Shopping Center

118,038 sf, Neighborhood Center, Austin, TX 78752

A $24.5 million loan was originated by Morgan Stanley on April 6, 2021 to refinance existing debt on a 118,000-sf retail property located in suburban Austin, TX. The 10-year loan has an interest rate of 4.36% and is structured with a 5-year interest-only period. After June 2026, the loan will require amortizing debt service payments based on a 30-year schedule. The loan is secured by a leasehold interest in a retail property anchored by grocer 99 Ranch Market with a 37,239-sf lease that expires in July 2032, 14 months after loan maturity. No other in-line tenant accounts for more than 7,500 sf of the property’s GLA. The retail center operates under two ground leases with The Board of Regents of The University of Texas System that require a base rent of approximately $245,000 plus 7% of adjusted gross revenues. The ground leases expire in January 2029 but have 3, 10-year extensions through January 2050. The property was appraised for $38.7 million, equal to $328/sf, as of February 4, 2021, which implies a capitalization rate of 4.51% based on the originator’s underwritten net cash flow. CRED iQ’s analysis factors in additional risk related to the ground lease as well as heavy reliance on restaurant tenants occupying the in-line suites. For the full valuation report and loan-level details, click here.

Subject Property
NameCrescent Shopping Center
Address6903 Airport Boulevard
Austin, TX 78752
TypeRetail
SubtypeAnchored
Building Size118,038 sf
Year Built1964
SubmarketHighland
CountyTravis County
MSAAustin-Round Rock, TX MSA
Origination Date04/06/2021
Valuation
Appraisal Value$38,700,000
Appraisal Date02/04/2021
MyQ Concluded Value$33,080,000

200 South Virginia Street

118,844 sf, CBD Office, Reno, NV 89501

Basin Street Properties secured a $15.9 million loan, originated by Bank of America, on June 2, 2021 to refinance existing debt on a 119,000-sf nine-story office building located in downtown Reno, NV. The loan was structured with an interest rate of 3.62% and has a 10-year term. The office tower was 87% occupied as of March 16, 2021 but the loan was underwritten by the originator assuming occupancy of 84%. Several large tenants at the property have lease expirations within the next 3 years. Co-working operator Regus is the largest tenant, accounting for 14% of the GLA, and has a lease that expires in September 2024. The third-largest tenant, Breadware Inc., has a lease accounting for 6% of the GLA that expires in February 2023. The property was appraised for $26.7 million, equal to $225/sf, as of April 2021, which implied a capitalization rate of 5.88% based on the originator’s underwritten net cash flow. CRED iQ’s analysis indicates moderate concern regarding the tenant roster over the loan’s term but our valuation is in line with the most recent appraisal given the assumption that the property can improve occupancy to be greater than 90%. For the full valuation report and loan-level details, click here.

Subject Property
Name200 South Virginia Street
Address200 South Virginia Street
Reni, Nevada 89501
TypeOffice
SubtypeCBD
Building Size118,844 sf
Year Built1982
SubmarketDowntown
CountyWashoe County
MSAReno-Sparks, NV MSA
Origination Date06/02/2021
Valuation
Appraisal Value$26,700,000
Appraisal Date04/06/2021
MyQ Concluded Value$25,250,000

Home Depot Warehouse

310,316 sf, Warehouse, Mexico, MO 65265

A $9.95 million loan was originated by Morgan Stanley on April 15, 2021 to facilitate the acquisition of a 310,000-sf single-tenant warehouse by the borrower sponsor, Ilan Goldstein. The 10-year loan has an interest rate of 4.85% and was structured to require amortizing debt service payments based on a 30-year schedule. The collateral property is located in rural Missouri along US Route 54, across the road from Mexico Airport. The property is leased to Home Depot through October 31, 2027, which is 3 and a half years prior to loan maturity on May 1, 2031. The lease expiration of the single tenant adds a layer of binary risk to the loan; however, the property is connected to a facility also operated by Home Depot that shares a joint inventory system. The property was appraised for $14.5 million, equal to $47/sf, in November 2020, which implied a capitalization rate of 5.80% based on the originator’s underwritten net cash flow. CRED iQ’s valuation is based on a 75% probability of lease renewal by Home Depot at lease expiration. For the full valuation report and loan-level details, click here.

Subject Property
NameHome Depot Warehouse
Address5701 U.S. 54 Business
Mexico, Missouri 65265
TypeIndustrial
SubtypeWarehouse
Building Size310,316 sf
Year Built1985
SubmarketMexico
CountyAudrain County
MSANon-Metropolitan Area – MO
Origination Date04/15/2021
Valuation
Appraisal Value$14,500,000
Appraisal Date11/20/2020
MyQ Concluded Value$12,620,000

Valley Forge Corporate Center

65,716 sf, Suburban Office, Audubon, PA 19403

An $8.97 million loan was originated by KeyBank on February 9, 2021 to refinance existing debt on a 66,000-sf office property located in suburban Philadelphia, PA. The loan was structured with a partial-term interest-only period of 2 years before it converts to amortizing payments. The loan’s monthly debt service amount will increase on April 1, 2023, which coincides with the start of a period of high lease rollover risk for the property. All 5 of the office building’s largest tenants have lease expirations prior to the loan’s maturity date in March 2031. The property’s largest tenant, American Regent, accounts for 35% of the GLA and has a lease expiration on August 31, 2025. Additionally, American Regent has a lease termination option for any time after August 31, 2023, which is five months after interest-only expiration. The second-largest tenant, Assurance Software, Inc, accounts for 27% of the GLA and has a lease expiration of April 30, 2025. The property was 90% occupied at the beginning of 2021. A January 1, 2021 appraisal valued the office center at $13.8 million, equal to $210/sf, which implied a capitalization rate of 6.40% based on the originator’s underwritten NCF. However, CRED iQ’s analysis factored in potentially significant leasing costs in years 2023 through 2026. For additional information, including borrower contacts, please reach out to our team. For the full valuation report and loan-level details, click here.

Subject Property
NameValley Forge Corporate Center
Address800 Adams Avenue
Audubon, Pennsylvania 19403
TypeOffice
SubtypeSuburban
Building Size65,716 sf
Year Built2008
SubmarketNorristown
CountyMontgomery County
MSAPhiladelphia-Camden-Wilmington, PA-NJ-DE-MD MSA
Origination Date02/09/2021
Valuation
Appraisal Value$13,800,000
Appraisal Date01/01/2021
MyQ Concluded Value$11,920,000

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. For full access to our loan database and valuation platform, sign up for a free trial below:

FREE TRIAL

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