Home Blog Page 34

Distressed Opportunities – Cleveland

By
CRED iQ
-
0

This week, CRED iQ continued to focus on distressed commercial real estate collateral located in Cleveland, OH and calculated real-time valuations for 5 properties within the MSA that have recently transferred to special servicing, including the tallest building in the state of Ohio. The August 2021 CRED DQ Report highlighted Cleveland as a market with one of the three-highest delinquency rates in the US, which opened the opportunity to take a deeper dive into a few of the assets behind the elevated level of distress. 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.

Key Center Cleveland

(Key Tower/Marriott Cleveland Downtown/Key Center Parking Garage)

1.4 million sf/400 keys/985 spaces, Mixed-Use (Office/Hotel/Parking), Cleveland, OH 44114

This $209.5 million loan transferred to special servicing in October 2020 due to imminent monetary default, which the borrower attributed to adverse impacts from COVID-19. The loan is secured by fee interests in a 1.4 million-sf Class-A office tower (Key Tower) and a 400-key hotel (Marriott Cleveland Downtown) as well a leasehold interest in a 985-space subterranean parking garage located under the adjacent Memorial Fountain (Key Center Parking Garage). All three structures are located in the CBD of Cleveland, on the northern corner of Cleveland Public square.

On an aggregate basis, net cash flow for the properties declined from $28.9 million in 2019 to $21.0 million in 2020, resulting in a DSCR of 1.32. However, the DSCR is below breakeven when factoring in $42.5 million of mezzanine debt, which was funded by Apollo Commercial Real Estate Finance. The decline in net cash flow during 2020 was primarily caused by a loss of revenue from the hotel and parking components of the collateral during the early stages of the pandemic. Base rents from the office component remained stable in 2020; although, servicer commentary noted the building’s namesake tenant, Key Bank, contracted its space by about 42,000 sf. Key Bank now leases about 18% of the property’s GLA and still has two more contraction options in the coming years, totaling about 60,000 sf.

Despite the distressed nature of the loan, the office tower remains well-positioned in the submarket. Reserves for the loan, including funds for leasing, are relatively healthy, totaling $10.5 million and CRED iQ has observed other tenants in the submarket vacate inferior properties in favor of Key Tower. Just last week, our WAR Report highlighted law firm Littler Mendelson vacating 1100 Superior Avenue to move into Key Tower. The borrower appears to be requesting temporary payment relief, as evidenced by servicer commentary. For the full valuation report and loan-level details, click here.

DoubleTree by Hilton – Cleveland OH

379 keys, Full-Service Hotel, Cleveland, OH 44114

This $26.6 million loan transferred to special servicing in October 2019 due to monetary default. The loan is secured by a full-service hotel that operates as a DoubleTree by Hilton via a franchise agreement that expires in November 2026. As a pre-pandemic transfer, the property’s operational struggles can be traced back to competition from newer, higher quality lodging projects in the CBD submarket, including the 600-key Hilton Cleveland Downtown. The borrower appears to have been cooperating with the placement of a receiver and attempted transition of the title to Greystone, the loan’s special servicer. However, a foreclosure moratorium in 2020 and ongoing labor issues with hotel employees have delayed a title transfer, which may make a note sale more plausible as a workout solution. For the full valuation report and loan-level details, click here.

DoubleTree Beachwood

404 keys, Full-Service Hotel, Beachwood, OH 44122

This distressed hotel opportunity has outstanding debt of $24.1 million and has been with the special servicer since April 2019. The property is a 404-key full-service hotel, and similar to the property highlighted above, operates as a DoubleTree by Hilton via a franchise agreement that expires in 2027. Torchlight, as special servicer, acquired title to the property on December 4, 2020 via a deed-in-lieu of foreclosure agreement. Our analysis indicates that the lodging facility is configured with an excessive quantity of rooms for its market, which has been a main driver behind the property’s operational struggles as well as an onerous franchise fee that has been reported to be over $1.1 million. Updated commentary indicates the property is actively being marketed for sale. For the full valuation report and loan-level details, click here.

Flats East Bank Phase I

150 keys, Mixed-Use (Hotel/Retail), Cleveland, OH 44113

This $22.7 million loan transferred to special servicing on June 1, 2020 due to imminent monetary default. The loan is secured by a mixed-use property that includes a 150-key hotel, 33,166 sf of retail space and a 174-space parking lot. The hotel operates under a franchise agreement with Sheraton’s Aloft brand that expires in June 2033. This Phase I property is part of a larger multi-phase development that includes other distressed properties as well. Phase II of the development, which included multifamily and retail uses, was also distressed in early 2021, but the mortgage loan secured by Phase II was ultimately purchased by a subordinate debtholder.

The Phase I property began having issues in 2017 when the largest retail tenant, EB Fitness, vacated its 16,071-sf suite. A new fitness tenant, Browns Fit, signed a lease to occupy the vacant space in 2019. Shortly after, the effects of COVID-19 began to take its toll on the property, especially the hotel component. The latest servicer commentary indicated Rialto, as special servicer, is in workout negotiations with the borrower. The viability of the hotel component is a key factor for the property because it has a deed restriction related to past environmental issues that prohibits residential use. For the full valuation report and loan-level details, click here.

The IMG Building

232,908 sf, Office, Cleveland, OH 44114

This $16.2 million loan transferred to special servicing on March 5, 2019 due to delinquency. The loan is secured by a Class-C office property, located in the shadow of One Cleveland Center within the CBD of Cleveland. The borrower has not provided updated occupancy or financial figures since loan origination; however, CRED iQ estimates current occupancy to be approximately 68%. According to Crain’s Cleveland Business, the property’s second largest tenant, MAI Capital Management, is vacating in favor of a suburban office location. Additionally, the third-largest tenant Bellwether Enterprise moved across the street to the aforementioned One Cleveland Center. The two tenants accounted for 20% of the property’s GLA. The servicer has filed for foreclosure and the borrower is contesting those actions. 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

August 2021 Delinquency Report

By
CRED iQ
-
0

The overall delinquency rate declined this month and continued a streak of downward movement since its peak in June 2020. The month-over-month improvement compared to the prior period is attributed to the lodging sector. Hotel properties continue to be a primary source distressed commercial real estate with the highest overall delinquency rate by property type; however, delinquencies in the sector continue to be resolved throughout the summer months, in turn bringing down the overall delinquency rate. The Cleveland, OH lodging market is an example month-over-month delinquency improvement, second-highest this month, despite nearly half of its lodging inventory still considered distressed. Markets with the highest month-over-month increases in delinquency for lodging properties included Birmingham, AL, Baltimore, MD and Los Angeles, CA. Implications from emerging concerns about the Delta variant of COVID-19 remain to be seen as select markets revert back to certain restrictions that may adversely impact commercial real estate collateral.

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 Cleveland. The San Francisco market saw the largest month-over-month increase in delinquency, although the spike was isolated to the 3,221-unit Parkmerced multifamily community. Accounting for the outlier, Louisville had the next highest increase in delinquency compared to the prior month. Sacramento, CA and Allentown, PA both reported the lowest delinquency rate among the Top 50 MSAs. The most significant month over-month decline in delinquency was in the Tucson market, which has seen volatile fluctuations in delinquency rates throughout the year.

For the full report, download here:

The-CRED-DQ-Report-August-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.

Delinquent & Specially Serviced Loans by MSA and Property Type

MSA – Property Type DQ/SS (millions)DQ/SS (%)Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA$19.50.6%-0.01%
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$19.55.1%0.00%
Allentown – Self Storage$0.00.0%0.00%
Atlanta – Atlanta-Sandy Springs-Marietta, GA MSA$749.13.1%-0.18%
Atlanta – Hotel$248.113.0%-0.55%
Atlanta – Industrial$0.00.0%0.00%
Atlanta – Multifamily$1.60.0%0.00%
Atlanta – Office$34.11.2%0.03%
Atlanta – Other$0.00.0%0.00%
Atlanta – Retail$465.317.1%-1.42%
Atlanta – Self Storage$0.00.0%0.00%
Austin – Austin-Round Rock, TX MSA$527.75.4%-0.36%
Austin – Hotel$419.444.7%-2.88%
Austin – Industrial$0.00.0%0.00%
Austin – Multifamily$0.00.0%0.00%
Austin – Office$0.00.0%0.00%
Austin – Other$0.00.0%0.00%
Austin – Retail$105.812.3%1.60%
Austin – Self Storage$2.52.1%2.10%
Baltimore – Baltimore-Towson, MD MSA$458.84.7%0.13%
Baltimore – Hotel$145.130.7%2.61%
Baltimore – Industrial$0.00.0%0.00%
Baltimore – Multifamily$2.20.0%0.00%
Baltimore – Office$16.92.7%0.27%
Baltimore – Other$0.00.0%0.00%
Baltimore – Retail$294.626.5%-0.15%
Baltimore – Self Storage$0.00.0%0.00%
Birmingham – Birmingham-Hoover, AL MSA$45.71.8%-0.64%
Birmingham – Hotel$22.721.4%3.47%
Birmingham – Industrial$0.00.0%0.00%
Birmingham – Multifamily$0.00.0%0.00%
Birmingham – Office$0.00.0%-4.94%
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$390.12.2%-0.03%
Boston – Hotel$98.712.8%-0.13%
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$291.314.7%-0.57%
Boston – Self Storage$0.00.0%0.00%
Bridgeport – Bridgeport-Stamford-Norwalk, CT MSA$263.96.6%-0.75%
Bridgeport – Hotel$63.851.3%-24.04%
Bridgeport – Industrial$17.812.9%0.00%
Bridgeport – Multifamily$0.00.0%0.00%
Bridgeport – Office$135.711.0%-1.21%
Bridgeport – Other$23.65.8%-0.98%
Bridgeport – Retail$22.96.4%0.00%
Bridgeport – Self Storage$0.00.0%0.00%
Charlotte – Charlotte-Gastonia-Concord, NC-SC MSA$354.54.2%-0.10%
Charlotte – Hotel$139.59.1%-0.37%
Charlotte – Industrial$0.00.0%0.00%
Charlotte – Multifamily$0.00.0%0.00%
Charlotte – Office$21.32.5%-0.10%
Charlotte – Other$85.023.3%0.29%
Charlotte – Retail$108.77.8%-0.84%
Charlotte – Self Storage$0.00.0%0.00%
Chicago – Chicago-Naperville-Joliet, IL-IN-WI MSA$2,111.67.8%0.00%
Chicago – Hotel$1,117.149.3%-1.19%
Chicago – Industrial$4.20.2%0.00%
Chicago – Multifamily$122.41.3%-0.10%
Chicago – Office$400.15.5%0.47%
Chicago – Other$117.95.8%-0.14%
Chicago – Retail$349.99.9%0.01%
Chicago – Self Storage$0.00.0%0.00%
Cincinnati – Cincinnati-Middletown, OH-KY-IN MSA$317.28.5%-0.23%
Cincinnati – Hotel$141.446.3%-0.42%
Cincinnati – Industrial$0.00.0%0.00%
Cincinnati – Multifamily$0.00.0%0.00%
Cincinnati – Office$11.62.4%-0.14%
Cincinnati – Other$15.85.1%-0.64%
Cincinnati – Retail$147.620.7%-0.04%
Cincinnati – Self Storage$1.01.6%1.57%
Cleveland – Cleveland-Elyria-Mentor, OH MSA$575.713.6%1.02%
Cleveland – Hotel$113.949.6%-9.48%
Cleveland – Industrial$0.00.0%0.00%
Cleveland – Multifamily$0.00.0%0.00%
Cleveland – Office$105.512.6%5.29%
Cleveland – Other$161.936.7%3.53%
Cleveland – Retail$194.420.2%-0.21%
Cleveland – Self Storage$0.00.0%0.00%
Columbus, OH – Columbus, OH MSA$235.83.9%0.12%
Columbus, OH – Hotel$84.826.5%0.22%
Columbus, OH – Industrial$0.00.0%0.00%
Columbus, OH – Multifamily$4.30.1%0.00%
Columbus, OH – Office$8.11.5%0.00%
Columbus, OH – Other$0.00.0%0.00%
Columbus, OH – Retail$128.314.9%-1.83%
Columbus, OH – Self Storage$10.417.8%17.84%
Dallas – Dallas-Fort Worth-Arlington, TX MSA$1,000.13.0%0.08%
Dallas – Hotel$460.812.7%0.21%
Dallas – Industrial$1.70.1%0.00%
Dallas – Multifamily$47.70.2%0.24%
Dallas – Office$154.44.2%-0.13%
Dallas – Other$23.91.6%-0.02%
Dallas – Retail$300.311.5%-1.19%
Dallas – Self Storage$11.22.1%2.13%
Denver – Denver-Aurora, CO MSA$339.42.0%0.04%
Denver – Hotel$43.45.0%-0.21%
Denver – Industrial$0.00.0%0.00%
Denver – Multifamily$0.00.0%0.00%
Denver – Office$194.79.5%0.33%
Denver – Other$7.01.2%-0.20%
Denver – Retail$91.25.9%-0.01%
Denver – Self Storage$3.11.8%1.80%
Detroit – Detroit-Warren-Livonia, MI MSA$575.56.4%-0.08%
Detroit – Hotel$316.941.6%-0.08%
Detroit – Industrial$40.67.5%-0.06%
Detroit – Multifamily$18.50.6%0.00%
Detroit – Office$0.00.0%0.00%
Detroit – Other$22.53.4%-0.09%
Detroit – Retail$177.010.2%-0.18%
Detroit – Self Storage$0.00.0%0.00%
Hartford – Hartford-West Hartford-East Hartford, CT MSA$227.69.3%-0.07%
Hartford – Hotel$95.964.2%-0.07%
Hartford – Industrial$0.00.0%0.00%
Hartford – Multifamily$11.10.8%-0.01%
Hartford – Office$87.622.2%0.02%
Hartford – Other$1.20.5%-0.01%
Hartford – Retail$31.813.0%-0.23%
Hartford – Self Storage$0.00.0%0.00%
Houston – Houston-Sugar Land-Baytown, TX MSA$1,522.16.1%0.02%
Houston – Hotel$715.960.0%-0.02%
Houston – Industrial$6.61.0%-0.06%
Houston – Multifamily$105.80.8%-0.04%
Houston – Office$525.714.3%-0.37%
Houston – Other$32.43.9%-0.30%
Houston – Retail$107.62.8%-0.05%
Houston – Self Storage$28.25.6%5.61%
Indianapolis – Indianapolis-Carmel, IN MSA$402.58.8%0.57%
Indianapolis – Hotel$169.526.6%-1.40%
Indianapolis – Industrial$0.00.0%0.00%
Indianapolis – Multifamily$97.24.7%1.53%
Indianapolis – Office$72.611.2%-0.01%
Indianapolis – Other$9.84.8%0.00%
Indianapolis – Retail$49.49.2%0.05%
Indianapolis – Self Storage$4.05.2%1.74%
Jacksonville – Jacksonville, FL MSA$77.31.5%-0.04%
Jacksonville – Hotel$48.211.1%-0.27%
Jacksonville – Industrial$0.00.0%0.00%
Jacksonville – Multifamily$20.00.6%0.00%
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$199.74.2%-0.31%
Kansas City – Hotel$150.747.7%-3.88%
Kansas City – Industrial$0.00.0%0.00%
Kansas City – Multifamily$7.60.3%0.00%
Kansas City – Office$0.00.0%0.00%
Kansas City – Other$2.82.1%-0.42%
Kansas City – Retail$37.05.8%-2.27%
Kansas City – Self Storage$1.60.8%0.76%
Las Vegas – Las Vegas-Paradise, NV MSA$387.21.9%-0.08%
Las Vegas – Hotel$18.30.3%-0.01%
Las Vegas – Industrial$0.00.0%0.00%
Las Vegas – Multifamily$0.00.0%0.00%
Las Vegas – Office$10.21.6%-0.09%
Las Vegas – Other$0.00.0%0.00%
Las Vegas – Retail$356.07.3%-0.36%
Las Vegas – Self Storage$2.61.3%1.31%
Los Angeles – Los Angeles-Long Beach-Santa Ana, CA MSA$2,422.04.9%0.29%
Los Angeles – Hotel$1,055.024.9%2.82%
Los Angeles – Industrial$2.00.2%-0.01%
Los Angeles – Multifamily$125.40.6%-0.01%
Los Angeles – Office$375.13.1%-0.01%
Los Angeles – Other$212.06.4%0.02%
Los Angeles – Retail$652.49.3%0.29%
Los Angeles – Self Storage$0.00.0%0.00%
Louisville – Louisville/Jefferson County, KY-IN MSA$633.720.3%2.33%
Louisville – Hotel$243.054.1%-0.55%
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$386.959.0%10.97%
Louisville – Self Storage$0.00.0%0.00%
Memphis – Memphis, TN-AR-MS MSA$200.38.1%0.05%
Memphis – Hotel$56.427.3%-2.19%
Memphis – Industrial$0.00.0%0.00%
Memphis – Multifamily$17.81.7%0.07%
Memphis – Office$43.311.4%0.65%
Memphis – Other$18.431.9%-3.76%
Memphis – Retail$62.815.3%-0.62%
Memphis – Self Storage$1.61.0%1.00%
Miami – Miami-Fort Lauderdale-Pompano Beach, FL MSA$913.84.2%0.30%
Miami – Hotel$359.07.8%-0.04%
Miami – Industrial$0.00.0%0.00%
Miami – Multifamily$8.50.1%0.02%
Miami – Office$26.41.3%-0.06%
Miami – Other$71.04.8%4.14%
Miami – Retail$448.89.1%-0.20%
Miami – Self Storage$0.00.0%0.00%
Milwaukee – Milwaukee-Waukesha-West Allis, WI MSA$255.810.5%-0.11%
Milwaukee – Hotel$35.723.1%-0.01%
Milwaukee – Industrial$0.00.0%0.00%
Milwaukee – Multifamily$0.00.0%0.00%
Milwaukee – Office$66.511.6%-1.58%
Milwaukee – Other$0.00.0%0.00%
Milwaukee – Retail$153.529.9%0.78%
Milwaukee – Self Storage$0.00.0%0.00%
Minneapolis – Minneapolis-St. Paul-Bloomington, MN-WI MSA$1,943.723.3%-0.57%
Minneapolis – Hotel$332.652.3%-0.23%
Minneapolis – Industrial$15.15.4%-1.73%
Minneapolis – Multifamily$0.00.0%-0.19%
Minneapolis – Office$152.57.4%-0.47%
Minneapolis – Other$11.72.8%1.67%
Minneapolis – Retail$1,431.869.8%0.03%
Minneapolis – Self Storage$0.00.0%0.00%
Nashville – Nashville-Davidson-Murfreesboro-Franklin, TN MSA$356.65.7%0.56%
Nashville – Hotel$344.524.7%2.20%
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%0.30%
Nashville – Self Storage$0.00.0%0.00%
New Orleans – New Orleans-Metairie-Kenner, LA MSA$452.913.3%-1.52%
New Orleans – Hotel$416.638.5%-3.55%
New Orleans – Industrial$0.00.0%0.00%
New Orleans – Multifamily$13.41.7%0.02%
New Orleans – Office$0.00.0%0.00%
New Orleans – Other$0.00.0%0.00%
New Orleans – Retail$22.92.9%-0.24%
New Orleans – Self Storage$0.00.0%0.00%
New York City – New York-Northern New Jersey-Long Island, NY-NJ-PA MSA$6,299.65.1%-0.49%
New York City – Hotel$1,872.150.1%0.26%
New York City – Industrial$7.50.4%0.00%
New York City – Multifamily$457.91.1%-0.19%
New York City – Office$547.51.3%-1.37%
New York City – Other$1,587.87.5%0.35%
New York City – Retail$1,826.812.8%-0.43%
New York City – Self Storage$0.00.0%0.00%
Orlando – Orlando-Kissimmee, FL MSA$555.24.7%-0.37%
Orlando – Hotel$243.38.4%-4.30%
Orlando – Industrial$0.00.0%0.00%
Orlando – Multifamily$25.50.4%0.00%
Orlando – Office$47.19.6%-0.01%
Orlando – Other$0.00.0%0.00%
Orlando – Retail$239.422.5%-2.04%
Orlando – Self Storage$0.00.0%0.00%
Philadelphia – Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA$970.55.1%-0.58%
Philadelphia – Hotel$350.428.9%-2.44%
Philadelphia – Industrial$0.00.0%0.00%
Philadelphia – Multifamily$118.71.3%-0.13%
Philadelphia – Office$47.31.1%-0.09%
Philadelphia – Other$79.45.8%-0.17%
Philadelphia – Retail$374.614.2%-1.76%
Philadelphia – Self Storage$0.00.0%0.00%
Phoenix – Phoenix-Mesa-Scottsdale, AZ MSA$631.53.2%0.63%
Phoenix – Hotel$89.95.4%-0.60%
Phoenix – Industrial$10.21.9%-0.07%
Phoenix – Multifamily$0.00.0%0.00%
Phoenix – Office$53.62.4%1.24%
Phoenix – Other$180.523.6%-0.42%
Phoenix – Retail$297.37.5%0.88%
Phoenix – Self Storage$0.00.0%0.00%
Pittsburgh – Pittsburgh, PA MSA$212.14.5%-0.07%
Pittsburgh – Hotel$150.448.9%0.32%
Pittsburgh – Industrial$0.00.0%0.00%
Pittsburgh – Multifamily$0.00.0%0.00%
Pittsburgh – Office$0.00.0%0.00%
Pittsburgh – Other$8.12.0%0.24%
Pittsburgh – Retail$53.67.1%-0.87%
Pittsburgh – Self Storage$0.00.0%0.00%
Portland – Portland-Vancouver-Beaverton, OR-WA MSA$548.98.3%-0.84%
Portland – Hotel$537.160.9%-0.57%
Portland – Industrial$0.00.0%-3.26%
Portland – Multifamily$10.20.2%-0.27%
Portland – Office$1.60.5%0.49%
Portland – Other$0.00.0%0.00%
Portland – Retail$0.00.0%-3.23%
Portland – Self Storage$0.00.0%0.00%
Raleigh – Raleigh-Cary, NC MSA$175.84.2%0.22%
Raleigh – Hotel$121.226.9%0.00%
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$41.89.4%1.66%
Raleigh – Self Storage$0.00.0%0.00%
Richmond – Richmond, VA MSA$151.94.4%0.25%
Richmond – Hotel$50.717.5%0.00%
Richmond – Industrial$6.95.0%-0.15%
Richmond – Multifamily$9.70.6%0.56%
Richmond – Office$0.00.0%0.00%
Richmond – Other$0.00.0%0.00%
Richmond – Retail$84.515.2%0.11%
Richmond – Self Storage$0.00.0%0.00%
Riverside – Riverside-San Bernardino-Ontario, CA MSA$405.84.5%-0.01%
Riverside – Hotel$94.719.1%0.33%
Riverside – Industrial$0.00.0%0.00%
Riverside – Multifamily$4.50.1%-0.04%
Riverside – Office$0.00.0%0.00%
Riverside – Other$0.00.0%0.00%
Riverside – Retail$306.613.6%0.34%
Riverside – Self Storage$0.00.0%0.00%
Sacramento – Sacramento-Arden-Arcade-Roseville, CA MSA$31.30.6%-0.02%
Sacramento – Hotel$6.31.7%0.00%
Sacramento – Industrial$0.00.0%0.00%
Sacramento – Multifamily$0.00.0%0.00%
Sacramento – Office$6.11.0%-0.20%
Sacramento – Other$0.00.0%0.00%
Sacramento – Retail$18.92.4%0.00%
Sacramento – Self Storage$0.00.0%0.00%
Salt Lake City – Salt Lake City, UT MSA$196.35.3%0.15%
Salt Lake City – Hotel$47.715.3%-0.03%
Salt Lake City – Industrial$0.00.0%0.00%
Salt Lake City – Multifamily$0.00.0%0.00%
Salt Lake City – Office$9.21.8%-0.18%
Salt Lake City – Other$0.00.0%0.00%
Salt Lake City – Retail$139.429.8%5.31%
Salt Lake City – Self Storage$0.00.0%0.00%
San Antonio – San Antonio, TX MSA$181.02.9%0.11%
San Antonio – Hotel$26.27.5%1.45%
San Antonio – Industrial$0.00.0%0.00%
San Antonio – Multifamily$8.20.2%0.00%
San Antonio – Office$0.00.0%0.00%
San Antonio – Other$0.40.5%-0.07%
San Antonio – Retail$144.816.3%-0.13%
San Antonio – Self Storage$1.40.9%0.88%
San Diego – San Diego-Carlsbad-San Marcos, CA MSA$670.26.1%0.12%
San Diego – Hotel$528.124.9%0.71%
San Diego – Industrial$0.00.0%0.00%
San Diego – Multifamily$0.00.0%0.00%
San Diego – Office$0.00.0%0.00%
San Diego – Other$20.93.3%-0.01%
San Diego – Retail$121.310.1%0.14%
San Diego – Self Storage$0.00.0%0.00%
San Francisco – San Francisco-Oakland-Fremont, CA MSA$1,152.25.2%3.64%
San Francisco – Hotel$203.78.6%0.00%
San Francisco – Industrial$0.00.0%0.00%
San Francisco – Multifamily$851.211.8%11.41%
San Francisco – Office$18.90.2%-0.01%
San Francisco – Other$30.61.7%-0.01%
San Francisco – Retail$47.83.6%-0.03%
San Francisco – Self Storage$0.00.0%0.00%
San Jose – San Jose-Sunnyvale-Santa Clara, CA MSA$171.41.2%0.07%
San Jose – Hotel$156.77.6%0.10%
San Jose – Industrial$0.00.0%0.00%
San Jose – Multifamily$0.00.0%0.00%
San Jose – Office$14.70.2%0.23%
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$244.51.5%-0.24%
Seattle – Hotel$237.717.5%-2.87%
Seattle – Industrial$0.00.0%0.00%
Seattle – Multifamily$0.00.0%0.00%
Seattle – Office$0.00.0%-0.03%
Seattle – Other$0.00.0%0.00%
Seattle – Retail$6.80.4%-0.18%
Seattle – Self Storage$0.00.0%0.00%
St. Louis – St. Louis, MO-IL MSA$412.59.4%-0.06%
St. Louis – Hotel$58.720.6%-0.02%
St. Louis – Industrial$0.00.0%0.00%
St. Louis – Multifamily$20.11.2%0.00%
St. Louis – Office$107.619.1%-0.08%
St. Louis – Other$24.74.9%-0.04%
St. Louis – Retail$201.419.5%-0.40%
St. Louis – Self Storage$0.00.0%0.00%
Tampa – Tampa-St. Petersburg-Clearwater, FL$414.84.2%0.07%
Tampa – Hotel$75.06.3%-0.08%
Tampa – Industrial$0.00.0%0.00%
Tampa – Multifamily$34.80.6%0.00%
Tampa – Office$24.14.1%-0.36%
Tampa – Other$0.00.0%0.00%
Tampa – Retail$281.020.5%-5.71%
Tampa – Self Storage$0.00.0%0.00%
Tucson – Tucson, AZ MSA$268.87.4%-1.94%
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$267.418.3%-20.98%
Tucson – Self Storage$0.00.0%0.00%
Virginia Beach – Virginia Beach-Norfolk-Newport News, VA-NC MSA$260.95.9%0.01%
Virginia Beach – Hotel$38.78.2%1.11%
Virginia Beach – Industrial$21.213.1%-0.93%
Virginia Beach – Multifamily$0.00.0%0.00%
Virginia Beach – Office$12.73.1%-0.40%
Virginia Beach – Other$0.00.0%0.00%
Virginia Beach – Retail$179.519.6%-0.28%
Virginia Beach – Self Storage$8.89.6%0.00%
Washington – Washington-Arlington-Alexandria, DC-VA-MD-WV MSA$927.73.3%-0.15%
Washington – Hotel$59.35.3%-3.16%
Washington – Industrial$0.00.0%0.00%
Washington – Multifamily$4.50.0%0.00%
Washington – Office$442.57.0%-0.07%
Washington – Other$249.712.0%-0.92%
Washington – Retail$171.75.4%-0.14%
Washington – Self Storage$0.00.0%0.00%
 Grand Total – Top 50 MSAs$32,842.54.9%0.02%
Source: CRED iQ

Specially Serviced Loans

By
CRED iQ
-
0

This week, CRED iQ calculated real-time valuations for 5 distressed properties that have recently transferred to special servicing, including two regional malls and a CBD office building in Cleveland, OH. For those interested in the affordable housing sector for multifamily properties, we highlighted two assets making negative headlines in suburban Indianapolis for neglect and mismanagement. 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.

Dayton Mall

778,487 sf, Regional Mall, Dayton, OH 45459

This $76.9 million loan transferred to special servicing on June 30, 2021 with non-monetary default cited as the reason. However, the transfer to special servicing was likely prompted by the June 13, 2021 bankruptcy of the borrower sponsor, Washington Prime Group. Prior to the owner’s bankruptcy, the mall’s occupancy and NCF had been declining significantly. Washington Prime Group identified the Dayton Mall as a highly levered asset on March 31, 2021 and re-classified the mall as a non-core part of its portfolio, making it a candidate for a discounted payoff or deed-in-lieu of foreclosure agreement.

The mall features two vacant anchor pads, consisting of a 203,548-sf former Elder-Beerman and a 185,790-sf former Sears, as well as two operational anchors, consisting of a 268,943-sf Macy’s and a 178,686-sf JCPenney. Only the JCPenney anchor pad is collateral for the mortgage loan. NCF for 2020 totaled $4.5 million with a DSCR of 0.90, and we don’t expect performance to materially improve in 2021. Midland Loan Services, as special servicer, has not commented on a workout strategy as Washington Prime Group’s bankruptcy proceedings will need to be resolved first. For the full valuation report and loan-level details, click here.

Brunswick Square

292,685 sf, Regional Mall, East Brunswick, NJ 08816

This $67.3 million loan transferred to special servicing on June 29, 2021 due to imminent monetary default at the borrower’s request. This marks the second transfer to special servicing within the past year as the loan last returned to the master servicer in December 2020 without any modifications. The loan is secured by 292,685 sf of in-line space at the Brunswick Square Mall. The mall is anchored by Macy’s and JCPenney but both tenants own their parcels and improvements.

Brunswick Square shares the same borrower sponsor as the Dayton Mall, discussed above, and similarly has been identified as a highly levered asset and non-core property. Rialto, as special servicer, is evaluating workout options which may revisit modification proposals. The in-line space collateral was 88% occupied as of December 2020 and has steadily declined from 99% occupancy at origination in 2014. For the full valuation report and loan-level details, click here.

1100 Superior Avenue

576,766 sf, CBD Office, Cleveland, OH 44114

This $48.0 million loan transferred to special servicing on June 28, 2021, due to delinquency. The loan is secured by a 22-story office tower located in the CBD of Cleveland, OH. The office building was 87% occupied as of March 2021 but was further impacted by the recent departure of its third-largest tenant, law firm Littler Mendelson. Littler Mendelson vacated 44,667 sf of space, accounting for 8% of GLA, at lease expiration in April 2021 in favor of Key Tower, which overlooks Cleveland Public Square. CRED iQ’s estimated occupancy for the property is 79%. The loan has been paid through April 6, 2021 and is over 60 days delinquent. LNR, as special servicer, has not commented on a workout solution for the loan. For the full valuation report and loan-level details, click here.

Lakeside Pointe At Nora & Fox Club Apartments

924 units, Multifamily, Indianapolis, IN 46240

This $32.0 million loan transferred to special servicing on June 29, 2021 due to imminent non-monetary default. The loan is secured by two multifamily properties with affordable housing restrictions that are located in suburban Indianapolis. According to an article from Fox59 News out of Indianapolis, the transfer to special servicing may be related to a lawsuit filed by the Indiana Attorney General’s Office against the borrower, which has a non-profit 501(c)(3) classification. The borrower’s non-profit status allows it to maintain an expemption from paying property taxes; although the exemption was recently revoked due to the issues outlined in the lawsuit.

The lawsuit alleges mismanagement and failure to maintain healthy living conditions for the properties’ residents. The Attorney General has requested a receiver be appointed to both properties. As recently as two weeks ago, the Lake Pointe at Nora property was damaged in a major fire that impacted the main leasing office and clubhouse and prior fires at the properties have resulted in downed units. Other items of concern included severe deferred maintenance, $1.2 million in outstanding water and sewer bills, mold, and broken fixtures throughout the premises. Aggregate NCF for both properties during 2020 was $1.2 million, which resulted in a DSCR of 0.61; however, property taxes were not included in those figures and could potentially total over $400,000. For the full valuation report and loan-level details, click here for Lakeside Pointe At Nora and here for Fox Club Apartments.

West Side Mall

420,434 sf, Power Center, Edwardsville, PA 18704

This $23.8 million loan transferred to special servicing on June 29, 2021 due to imminent monetary default at the borrower’s request. The loan is secured by a power center located in the Scranton–Wilkes-Barre MSA and the borrowing entity is encumbered by $2.0 million in mezzanine debt, which was held by Ladder Capital at origination. The property is anchored by a Lowe’s Home Improvement and a Price Chopper. Lowe’s owns its improvements and operates via a ground lease that expires in January 2027. Occupancy at the property was last reported to be 71% as of September 2020. Full-year financial statements were not reported for 2020 but the loan had a below breakeven DSCR in 2019 and 2018. Rialto, as special servicer, is in the process of initiating communication with the borrower. 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

REO Retail Properties

By
CRED iQ
-
0

This week, CRED iQ calculated real-time valuations for 5 retail properties that have had title transfers and are now REO. Highlighted properties include the Montgomery Mall in North Wales, PA, which was featured in a Philadelphia Business Journal article that cited CRED iQ analysis. 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.

Montgomery Mall

1.1 million sf, Regional Mall, North Wales, PA 19454

This property, which has outstanding debt of $100.0 million, has been with the special servicer since June 16, 2020, and title to the mall transferred to LNR on July 12, 2021, according to the Philadelphia Business Journal. Prior to the mall becoming REO, the previous owner, Simon Property Group, had been discussing potential loan modification solutions, but foreclosure was filed. Two anchor pads at the mall are ground leased to Macy’s and a Wegmans supermarket while a third is leased to JCPenney. Another anchor pad was ground leased to Sears, but the location closed in 2020. Servicer-reported occupancy for the mall of 87% is a bit misleading considering the Sears closure and our estimation that in-line occupancy is trending sub-60%. Likewise, the most recent appraisal for the mall was $61.0 million; although CRED-iQ’s Base-Case Valuation calculates a lower figure. Next steps are for the property are stabilization or placement on the market to be sold. For the full valuation report and loan-level details, click here.

North Oaks

448,740 sf, Power Center, Houston, TX 77069

This property, which has outstanding debt of $23.7 million, has been with the special servicer since June 18, 2020, and title to the property transferred to LNR on June 1, 2021. The retail center is located in northwest Houston and is anchored by a Hobby Lobby with a lease, accounting for 12.5% of the GLA, that is scheduled to expire on August 31, 2021. The owner of the former loan sponsor, Nate Paul of World Class Capital Group, has been embattled in bankruptcies and legal proceedings; however, the North Oaks center has also struggled with occupancy, which was last reported to be 72% at the end of 2019. Notably, TJ Maxx vacated in 2019 in favor of a new location at a neighboring shopping center. Special servicer commentary stated the property is not yet listed for sale. For the full valuation report and loan-level details, click here.

Portsmouth Station Shopping Center

147,104 sf, Strip Center, Manassas, VA 20110

This property, which has outstanding debt of $18.5 million, has been with the special servicer since June 18, 2020, and became REO just over a year later on June 25, 2021. The retail center is located in northern Virginia, approximately 50 miles west of Washington, DC and is anchored by a Regency Furniture store with a lease, accounting for 31% of the GLA, that is scheduled to expire in 2030. Regency Furniture backfilled a former Toys “R” Us location, which closed following the company’s bankruptcy and liquidation. The property is 78% occupied and special servicer commentary stated the property is not yet listed for sale. For the full valuation report and loan-level details, click here.

Brettwood Village Shopping Center

205,180 sf, Retail Center, Decatur, IL 62526

This property, which has outstanding debt of $9.2 million, has been with the special servicer since May 21, 2020, and a deed-in-lieu of foreclosure agreement was finalized on June 2, 2021. The retail property is located in central Illinois and is anchored by a Kroger supermarket, accounting for 28% of the GLA, with a lease that is scheduled to expire in April 2026. The property is 64% occupied following the departure of several tenants over the past few years, including TJ Maxx, American Furniture Group, Dollar General, and Payless ShoeSource. Special servicer commentary stated the property may be ready for sale by May 2022. For the full valuation report and loan-level details, click here.

Market Square at Montrose

166,373 sf, Big Box Retail, Fairlawn, OH 44333

This property, which has outstanding debt of $5.4 million, has been with the special servicer since June 9, 2020, and title of the property transferred to LNR on June 30, 2021. The property consists of a leasehold interest in a big-box retail building located outside of Akron, OH. Ground rent for the property costs about $500,000 per year. A 42% portion of the building was occupied by Levin Furniture through December 2020 when the tenant vacated after bankruptcy issues related to affiliate Art Van Furniture. The other 58% portion of the building is leased to JCPenney through October 2027, which is coincidentally coterminous with the property’s ground lease. CRED-iQ’s Base-Case Valuation assumes the departure of JCPenney at lease expiration and the reversion of the improvements to the ground lessor, resulting in little to no residual value for the property, unless the ground lease can be re-negotiated. 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

CRED iQ’s WAR (Weekly Asset Review) Report – Lease Expirations

By
CRED iQ
-
0

This week, CRED iQ calculated real-time valuations for 5 properties with exposure to major tenants with lease expirations in 2021. Featured leases include large blocks of office space that were vacated by Bank of America, in the Chicago market, and Wells Fargo, in the Charlotte market. 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.

301 South College Street

One Wells Fargo Center

988,646 sf, CBD Office, Charlotte, NC 28202

We first brought attention to the largest tenant’s lease expiration at this property in our April 12th LinkedIn post. As a refresher, Wells Fargo is vacating 501,269 sf of space on December 31st at One Wells Fargo Center, a Class-A office tower located in the CBD of Charlotte. The tenant is reducing its footprint at the property but will retain 185,565 sf of space with a lease that expires in 2032. Among the spaces that will be available are the entire floor plates for stories 7 through 20. Fee and leasehold interests in the office tower secure a $165.3 million loan that has been on the servicer’s watchlist since January 2021. CRED iQ’s estimated occupancy for the property is 48%; although, the loan has a healthy reserve balance of $16.6 million and a cash trap is in place, equal to $30 per square foot of vacated space, that should help leasing efforts. For the full valuation report and loan-level details, click here.

135 South Lasalle

1.3 million sf, CBD Office, Chicago, IL 60603

Bank of America is vacating 788,499 sf of space on July 31st at 135 South LaSalle, a Class-A office tower located in the Central Loop submarket of Chicago. The property secures a $100.0 million mortgage loan that has been on the servicer’s watchlist since August 2020. July servicer commentary finally confirmed Bank of America’s departure, which was widely speculated over the prior 12 months. CRED iQ’s estimated occupancy for the property is 24%. The loan remains current in payment and has an anticipated repayment date on May 1, 2025 with a final maturity date on May 1, 2030. For the full valuation report and loan-level details, click here.

Cool Springs Commons

301,697 sf, Suburban Office, Brentwood, TN 37027

Community Health Systems (CHS), a healthcare operator and provider based in Tennessee, is the largest tenant at Cool Springs Commons, accounting for 66% of the GLA with a 199,915-sf lease that expired in January 2021. Cool Springs Commons is a Class-B office property located in suburban Nashville. Commentary from the servicer stated that CHS has already relocated many of its employees, which indicates downsizing by the tenant at best. A second tenant, Comprehensive Health Management, has a 17,789-sf lease that expires on November 30, 2011. CRED iQ’s estimated occupancy for the property is 31%, assuming that CHS completely vacates instead of downsizing. For the full valuation report and loan-level details, click here.

Owasso Market

351,370 sf, Power Center, Owasso, OK 74055

The Owasso Market power center in Owasso, OK, which is shadow-anchored by a Walmart Supercenter, continues to work through lease rollover issues. The property’s largest tenant, Lowe’s Home Improvement, has a 191,940-sf ground lease, accounting for 55% of the GLA, that is set to expire on September 30, 2021, but has six, five-year extension options remaining. The second-largest tenant, Kohl’s, had an 86,584-sf lease, accounting for 25% of the GLA, that expired in January 2021 but the retailer signed a five-year renewal through January 2026. The third-largest tenant, Office Depot, has a 20,000-sf lease, accounting for 6% of the GLA, that is scheduled to expire on December 31, 2021 and has a fairly generous list of termination options. The loan secures an $18.8 million loan that is scheduled to mature in August 2028. CRED iQ’s estimated occupancy is 93%, assuming Lowe’s Home Improvement renews and Office Depot vacates. For the full valuation report and loan-level details, click here.

10310 Harwin Drive

311,486 sf, Industrial, Houston, TX 77036

Both tenants at this gated warehouse facility, located in southwest Houston, have lease expirations in 2021. GRM, a document management company, has a 173,095-sf lease, accounting for 56% of the GLA, that is scheduled to expire on October 31, 2021. The remaining 44% of GLA is occupied by Iron Mountain through a 138,391-sf lease that expired on June 30, 2021. The warehouse is part of a two-property portfolio that secures a $15.9 million loan, which is scheduled to mature on February 6, 2022. There have been no leasing updates from the borrower based on July’s servicer commentary; however, GRM is affiliated with the borrower sponsor. Based on CRED iQ’s Base-Case valuation, leverage for the property is not a significant concern; although the lease rollover issues may require some type of bridge financing. 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

CRED iQ’s WAR (Weekly Asset Review) Report – Specially Serviced Loans

By
CRED iQ
-
0

This week, CRED iQ calculated real-time valuations for 5 distressed properties that have recently transferred to special servicing, including a storied New York City hotel and a couple of mixed-use projects. 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.

Royalton Park Avenue

(Gansevoort Park Avenue)

249 Keys, Full-Service Hotel, New York, NY 10016

This $124.0 million loan transferred to special servicing on June 3, 2021 due to imminent default. The loan is secured by a luxury boutique hotel that is lcoated in the NoMad submarket of Manhattan and operates under the Royalton brand. Although the mortgage loan was originated in 2012, when the hotel was operating under the Gansevoort brand, the property was acquired for $200 million, equal to $800,000 per key, in 2017 by a joint venture between GreenOak Real Estate and Highgate Hotels. The hotel is temporarily closed and the earliest available reservations were for September 1, 2021.

Although COVID-19 was cited a contributing factor for the transfer to special servicing, the property had operational concerns pre-pandemic with a DSCR of 0.52 in 2019 based on $4.7 million in NCF. This represented a 70% decline since origination. The hotel had a net loss of $8.7 million in 2020 and a modification for relief in the form of relaxed cash management and reserve requirements was previously granted in May 2020. Negotiations between the borrower and LNR, as special servicer, are ongoing. For the full valuation report and loan-level details, click here.

Chatham Village

124,018 sf, Retail, Chicago, IL 60619

This $22.9 million loan transferred to special servicing on June 8, 2021 due to payment default. The loan is secured by four retail buildings, including a single-tenant Walgreens outparcel, located on the South Side of Chicago. All four buildings were formerly shadow-anchored by Target, but the retailer closed the adjacent non-collateral location in 2018. Without a complementary shadow anchor, occupancy across the 3 buildings with in-line suites declined. News broke in March 2021 that Discover would convert the former Target into a credit card call center; however, the development may not produce the necessary foot traffic needed for the property’s retail tenants to achieve sales targets. For the full valuation report and loan-level details, click here.

The Tower

181,285 sf Mixed-Use (Office/Retail), Fort Worth, TX 76102

This $18.9 million loan transferred to special servicing on June 1, 2021, days before its June 6, 2021 maturity date. The loan is secured by office and ground floor retail space that is part of six condominium units. Only four of the six condominium units are collateral for the loan and the condominium association pays ground rent for a portion of the building. Further complicating matters, the property has a tenant-in-common ownership structure. Check out CRED iQ’s Contacts page for more details about owners on record.

The property’s largest tenant had been Alcon Laboratories until it vacated in January 2021 through a lease termination option. Occupancy at the property declined to 48%, which may add difficulty in the borrower group’s search for refinancing options. For the full valuation report and loan-level details, click here.

147-149 Grand Street

8,409 sf, Mixed-Use (Retail/Multifamily), New York, NY 10013

This $12.0 million loan transferred to special servicing on June 7, 2021 due to payment default. The loan is secured by a mixed-use building located in the SoHo submarket of Manhattan that contains 2,850 sf of ground-floor retail space and 6 multifamily units on the upper levels. The loan had a DSCR of 0.77 in 2020 based on $432,000 in NCF and is scheduled to mature in October 2021. Midland Loan Services, as special servicer, sent a default notice and pre-negotiation letter to the borrower. For the full valuation report and loan-level details, click here.

Indian Lake West Plaza

41,328 sf, Retail, Hendersonville, TN 37075

This $6.4 million loan transferred to special servicing on June 14, 2021 due to delinquency. The loan is secured by 41,328 sf of in-line retail space that is shadow-anchored by a Hobby Lobby. Occupancy declined to 84% in early 2021 when the property’s fourth-largest tenant, FitRev Gym, relocated to a nearby Walmart-anchored shopping center. Prior to the transfer to special servicing, the Borrower had cited pandemic-related hardships as a reason for the property being distressed. Complicating matters, the property’s largest tenant, Tuesday Morning, has a lease expiration in January 2022. 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

July 2021 Delinquency Report

By
CRED iQ
-
0

The overall delinquency rate declined compared to the prior month, which marks a full year of downward movement starting from its peak in June 2020. Lodging continues to be the sector leader in delinquent loans with many markets slow to emerge out of pandemic-induced distress. The lodging delinquency rate declined for a majority of the Top 50 MSAs this month but increases in payment defaults are still notable in certain markets such as Bridgeport, CT and Cleveland, OH. Retail continues to move the needle as well, weighted heavily by regional malls, as is the case in the Tucson, AZ market, which had the largest month-over-month % change in delinquency. The two largest retail properties in the MSA are distressed.

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 was in Minneapolis, followed by Louisville and New Orleans. The Tucson retail market saw the largest month-over-month increase in delinquency. Allentown, Pennsylvania reported the lowest default rate among the 50 MSAs. The most significant month over-month decline in delinquency was in the Memphis market.

For the full report, download here:

The-CRED-DQ-Report-July-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.

CRED iQ’s WAR (Weekly Asset Review) Report – July’s Auction Valuation Guidance

By
CRED iQ
-
0

This week, CRED iQ calculated real-time valuations for 5 distressed lodging and retail assets that we expect to be sold in July. 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.

Homewood Suites – Lansdale

170 keys Extended-Stay Hotel, Lansdale, PA 19446

This $13.7 million loan transferred to special servicing on March 4, 2015 due to delinquencies leading up to its May 6, 2015 maturity date. Special servicer LNR acquired title to the property in 2019. The property is an extended-stay hotel that operates as a Homewood Suites through a franchise agreement with Hilton that expires on May 22, 2022. The hotel is in need of a lobby renovation that could cost approximately $430,000 and a change-of-ownership Property Improvement Plan was quoted at $6.8 million, or $40,000 per key.

Demand for the property was primarily sourced from Merck, which operates a manufacturing facility adjacent to the property and is a major employer in the area; however, the pharmaceutical company laid off 600 local employees in 2014 and cut another 500 local jobs in 2019. NCF was negative for the property in 2020. A sale of the property is expected by the end of July. For the full valuation report and loan-level details, click here.

Springhill Suites – Willow Grove PA

155 keys Limited-Service Hotel, Willow Grove, PA 19090

This $11.4 million loan transferred to special servicing on April 14, 2017 due to delinquency. Special servicer LNR acquired title to the property in 2019. The hotel operates as a SpringHill Suites by Marriott through a franchise agreement that expires in 2027. The franchise agreement has 2, 10-year extension options but also has a termination fee. Two additional Marriott-branded hotels are in the immediate vicinity, including 108 keys for a Fairfield Inn & Suites that was constructed in 2016 on an adjacent parcel, just prior to the SpringHill Suites transfer to special servicing. A Property Improvement Plan will be required upon change of ownership. Occupancy averaged 18% in 2020 and the hotel had negative NCF for the year. Hospitality Real Estate Counselors (HREC) has the sale listing and will auction the property at the end of July. For the full valuation report and loan-level details, click here.

Courtyard By Marriott – Shawnee

90 keys, Full-Service Hotel, Shawnee, KS 66217

This $7.0 million loan transferred to special servicing on April 29, 2020 due to historical cash flow struggles. The loan is secured by a full-service hotel that operates as a Courtyard by Marriott and primarily competes with four other hotels located off Exit 5 of the Interstate 435 loop around Kansas City, MO. Although distinguishable by its brick veneer, the hotel is the second-oldest of it competitive set. The three newest hotels with a total of 256 keys came online between 2014 and 2016 and were the primary cause of operational struggles. Pre-COVID, the property averaged 70% occupancy in 2019 but only had NCF of $151,000. Carry costs and expenses outweighed revenues in 2020.

Foreclosure has been initiated and receivership is in place, but the borrower is permitted to sell the property. The special servicer, Midland Loan Services, stated plans of an auction of loan via a note sale on the Ten-X platform. For the full valuation report and loan-level details, click here.

Bel Air Center

32,200-sf Retail Strip Center, Roseville, CA 95661

This $5.2 million loan transferred to special servicing almost six years ago due to maturity default. The maturity default was related to an ongoing issue related to on-site tetrachloroethylene (PCE) contamination from a drycleaner tenant. A small strip center that is shadow-anchored by a Bel Air grocery store collateralizes the debt. Receivership has been established and an environmental engineering firm has been retained for further testing and remediation plans. The special servicer has postponed a foreclosure sale multiple times and has opted for a note sale via auction. Interested parties may want to pay close attention to the property’s Environmental Site Assessment reports as remediation of PCE contamination is a costly endeavor. For the full valuation report and loan-level details, click here.

High Ridge Center

260,664-sf Retail Center, Racine, WI 53406

This distressed property with an associated balance of $9.6 million has been REO for over five years since LNR acquired title on February 12, 2015. The property is a nearly vacant retail center save for a 111,493-sf Home Depot with a lease that expires on April 30, 2023. Home Depot appears to have paid $743,000 in base rent during 2020. We anticipate the property to hit the auction circuit at the end of July. For loan-level details, click here.

About CRED iQ

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

FREE TRIAL

CRED iQ’s WAR (Weekly Asset Review) Report – Distressed Multifamily Opportunities

By
CRED iQ
-
0

This week, CRED iQ calculated real-time valuations for five distressed loans secured by multifamily properties. 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 contact information, sign up for a free trial here.

1209 Dekalb

127-unit Multifamily, Brooklyn, NY 11221

The $46.0 million loan transferred to special servicing on 10/22/20 due to maturity default. The loan is secured by a 5-story mid-rise apartment building and 46 parking spaces located on 1209 Dekalb Avenue in the Bushwick neighborhood of Brooklyn. Foreclosure appears to be the likely workout strategy even though the borrower retained a third-party advisor and requested for a maturity extension. However, with the state of New York’s foreclosure moratorium in place through 8/31/21, any such filings will be on hold. Occupancy at the property declined from 99% in 2019 to 86% in 2020, corresponding to an 18% decline in NCF. The loan’s DSCR during 2020 was 1.16. For the full valuation report and loan-level details, click here.

1502 Dekalb Avenue

6-unit Multifamily, Brooklyn, NY 11237

Also in Bushwick, but on a much smaller scale than 1209 Dekalb, a $924,000 small-balance loan transferred to special servicing on 8/20/19 for chronic delinquency. A 3-story apartment building serves as collateral and is located at 1502 Dekalb Avenue. The property had an outstanding water lien, which was advanced by the special servicer, Arbor Commercial Mortgage, in order to prevent the New York City Finance Department from selling the obligation. The loan sponsor has been unresponsive with any communication or financial reporting. For the full valuation report and loan-level details, click here.

Glenwood Farms Apartments

294-unit Multifamily, Richmond, VA 23223

The $9.7 million floating-rate loan, inclusive of a $7.3 million note and a $2.4 participation funded post-origination, transferred to special servicing on 2/25/21 for maturity default. The loan is secured by a series of walk-up apartments located in Richmond, VA. The loan still has 2, 12-month extension options remaining; however, the Borrower has been unresponsive with any communication with the special servicer. A term sheet for refinancing was supposedly signed for the end the April 2021; however, the loan remained outstanding as of June 2021. For the full valuation report and loan-level details, click here.

Autumn Run

320-unit Multifamily, Naperville, IL 60563

A $5.5 million floating-rate junior-lien mortgage transferred to special servicing on 2/4/21 due maturity default after the borrower was granted two 60-day extensions. The loan had an original maturity date of 10/1/20 and the extension was intended to help align maturity dates with the first-lien $8.5 million fixed-rate mortgage that is scheduled to mature on 10/1/21. The first lien mortgage is current in payment and has not transferred to special servicing. The two loans are secured by the Autumn Run Apartments, a garden-style complex located in Naperville, IL. Occupancy at the property declined to 84% during 2020, compared to 92% in the prior year, and NCF was down about 15% year over year. The borrower appears to be waiting until July 2021, when the senior mortgage is open for prepayment, to securing refinancing for the total outstanding debt. For the full valuation report and loan-level details, click here.

Dauphin

22-unit Multifamily, Philadelphia, PA 19125

We close out this week’s WAR report with a local distressed opportunity in Philadelphia. This $2.6 million loan transferred to special servicing on 5/11/21 due to maturity default after the borrower was previously granted a 60-day extension. The loan is secured by a 3-story mid-rise apartment building located across multiple addreses at 2152-2158 East Dauphin Street in the submarket of Fishtown. The borrower had been in the process of securing a HUD loan; however, was unable to complete the refinance prior to the end of the maturity extension. The special servicer is in discussions for additional options. For the full valuation report and loan-level details, click here.

About CRED iQ

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

FREE TRIAL

CRED iQ and Waterstone Defeasance Announce Integration Partnership

By
CRED iQ
-
0
CRED iQ partners with Waterstone to provide real-time defeasance costs across all loans on CRED iQ’s $1 trillion loan platform

CRED iQ, a data, analytics and valuation platform serving the commercial real estate finance and investment communities today announced the integration of the Waterstone Defeasance Calculator into its User Interface. CRED iQ clients can now view total defeasance costs for all loans within its massive database totaling almost $1 trillion in commercial debt.   

“Understanding the cost of defeasing a loan helps both CRE borrowers and brokers make smarter and faster decisions when it comes to refinancing, loan assumptions or selling a property”, said Co-Founder Michael Haas of CRED iQ.

“We’re excited to work with Waterstone to integrate their calculator into our platform. Adding this feature is one example of understanding our clients’ preferences and delivering technology to help streamline their decision-making process”, said Co-Founder, Bill Petersen.

CRED iQ tracks, analyzes and values over 125,000 properties within its data and analytics platform, which includes the full CMBS Investor Reporting Package.  Refreshed monthly, key data points such as current loan balances, origination and maturity dates, tenants’ lease expirations, servicer commentary, and borrower contact details makes CRED iQ a one-stop-shop for CRE professionals. 

“Integrating with CRED iQ’s loan and property data gives clients the right information at the right time to make good decisions regarding the exit strategy on a loan and its corresponding properties.  Waterstone and CRED iQ can now provide the client with Defeasance prepayment costs along with estimates ranging from 30 to 120 days from the estimated closing date”, said George Rodriguez of Waterstone.

About CRED iQ

CRED iQ is a commercial real estate data, analytics and valuation platform serving professionals across the CRE investment, brokerage, and lending industries. Headquartered in Radnor, PA, the company also has offices in Dallas and Portland, Oregon. 

Michael Haas

Co-Founder/Managing Partner

mike@cred-iq.com

cred-iq.com

About Waterstone Defeasance

Waterstone Defeasance, LLC is an independent consulting firm specializing in assisting commercial real estate borrowers through the prepayment process.  Since 2005, Waterstone has assisted owners and their advisors achieve the lowest possible defeasance costs.  Waterstone has developed an industry-leading online defeasance calculator so clients can get a quick prepayment estimate on their website (defeasanceservices.com).  Headquartered in Raleigh, North Carolina, the company also has offices in New York, Dallas, and Anaheim.

George Rodriguez

Managing Partner

George@WaterstoneDefeasance.com

DefeasanceServices.com

Related Stories:

https://finance.yahoo.com/news/cred-iq-waterstone-defeasance-announce-145100282.html

https://www.prnewswire.com/news-releases/cred-iq-and-waterstone-defeasance-announce-integration-partnership-301321285.html

https://www.morningstar.com/news/pr-newswire/20210629ph26006/cred-iq-and-waterstone-defeasance-announce-integration-partnership

https://seekingalpha.com/pr/18376530-cred-iq-and-waterstone-defeasance-announce-integration-partnership

1...33343536Page 34 of 36
2,085FollowersFollow
6SubscribersSubscribe
© Copyright 2024, CRED iQ. All rights reserved.