Vacant Properties

October 6, 2021

This week, CRED iQ calculated real-time valuations for 5 properties that are either vacant or dark, including two hotels that have been closed due to the pandemic and two vacant office buildings in the San Jose, CA MSA. Vacant or non-operational properties are opportunities for off-market transactions. In cases of distress, new ownership has the ability to infuse capital into a project and vacant suites are always on the radar of leasing brokers. 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.

Empire Hotel & Retail

423 keys, Hotel, New York, NY 10023

The Empire Hotel, located in the Lincoln Square submarket of Manhattan, closed in March 2020 due to the pandemic and has been out of operation throughout 2021. The hotel, as well as 61,223 sf in retail space, secures a $169.3 million loan that transferred to special servicing in May 2021. The loan was modified shortly after the onset of the pandemic in May 2020 to allow the borrower to fund debt service payments with reserves. The modification proved to be insufficient in keeping the loan current and the borrower appears to be requesting for additional relief.

Multiple sources point to January 2022 as possible timeframe for reopening for the hotel, which operates independently. Despite zero incoming revenue from the hotel portion of property, the retail spaces have been operational on a limited basis throughout the pandemic, apart from the 16,000-sf rooftop lounge. Retail occupancy includes ground-floor retail tenants Duane Reade (12,557 sf) and Starbucks (2,676 sf). Still, the pandemic wasn’t the initial cause of distress for loan, which had a below breakeven DSCR of 0.78 during 2019 due to increases in operational leverage. 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 Name	Empire Hotel
Address	^{44 West 63rd Street New York, NY 10023}
Outstanding Balance	$169,267,019
Interest Rate	4.57%
Maturity Date	1/6/2023
Most Recent Appraisal	$393,000,000
Most Recent Appraisal Date	11/20/2012

Empire Hotel & Retail - GSMS 2013-GC10 - CGCMT 2013-GC11

427 Broadway

34,498 sf, Mixed-Use (Office/Retail), New York, NY 10013

Last week’s WAR Report took us to the corner of Broadway and Howard Street in the SoHo submarket of Manhattan to evaluate the vacant 428 Broadway. We don’t have to look any further than across the street for another vacant property with 427 Broadway. The property is part of a 2-building portfolio that secures a $76.5 million mortgage loan. The debt stack also includes an $11.5 million mezzanine loan that was held by Jefferies LoanCore at origination. The second property that is part of the portfolio is 459 Broadway. The loan shares the same sponsor, Jacob Chetrit, as 428 Broadway. The loan transferred to special servicing in June 2021 and Rialto, as special servicer, is discussing potential workouts with the borrower.

427 Broadway is a five-story building that contains ground-floor and below-grade retail space in addition to four floors of office space. The vacant retail space was formerly occupied by American Apparel (8,498 sf), which vacated in July 2017. The vacant office space was formerly occupied by Night Agency (6,500 sf) and Psyop Media Company (19,500 sf). Psyop Media Company vacated ahead of its April 2025 lease expiration and is obligated to pay a termination fee of approximately $4.0 million. As mentioned last week, the high-street retail leasing environment in Manhattan remains extremely challenging, especially with a concentration of vacancies in the SoHo submarket. 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 Name	427 Broadway
Address	^{427 Broadway New York, NY 10013}
Outstanding Balance	$38,250,000 (allocated loan amount)
Interest Rate	4.95%
Maturity Date	1/6/2025
Most Recent Appraisal	$55,000,000
Most Recent Appraisal Date	9/29/2014

427 Broadway - SoHo Portfolio - COMM 2015-DC1

Hotel on Rivington

107 keys, Hotel, New York, NY 10002

Hotel on Rivington was vacant until about two weeks ago when the boutique Lower East Side hotel re-opened. The property had previously been closed since March 2020. Hotel on Rivington secures a $36.3 million loan that matures in March 2026. Despite the property having 0% occupancy for nearly 18 months, the loan has been current in payment. Servicer commentary also indicates a new owner may have assumed the mortgage loan with plans to invest additional capital into the hotel. The property was nearly sold for $65.0 million in November 2018 to the Kushner Companies but the deal ultimately fell through. The 20-story hotel contains 107 keys and is located in the Lower East Side on Manhattan, NY. 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 Name	Hotel on Rivington
Address	^{107 Rivington Street New York, NY 10002}
Outstanding Balance	$36,252,394
Interest Rate	4.96%
Maturity Date	3/6/2026
Most Recent Appraisal	$66,000,000
Most Recent Appraisal Date	11/30/2015

Broadcom Building

200,000 sf, Office, San Jose, CA 95134

This 200,000-sf vacant office building is located in San Jose, CA and secures a $34.8 million mortgage loan. The property was formerly occupied by Broadcom as a single tenant; however, Broadcom vacated in May 2018, ahead of its May 2020 lease expiration. Broadcom paid a $2.5 million termination fee. In total, borrower has reserved about $4.5 million for leasing costs for the property, which is actively being marketed. Colliers has the listing and is marketing the property as a headquarters with flexibility as R&D or lab space and campus-like amenities such as an outdoor amphitheater and tennis courts. The loan has been current in payment; however, it has been over 2 years without positive cash flow at the property. 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 Name	Broadcom Building
Address	^{3151 Zanker Road San Jose, CA 95134}
Outstanding Balance	$34,791,678
Interest Rate	4.10%
Maturity Date	1/11/2025
Most Recent Appraisal	$55,000,000
Most Recent Appraisal Date	11/5/2014

Tintri Mountain View

67,000 sf, Office, Mountain View, CA 94043

This 67,000-sf vacant office building is located in Mountain View, CA and secures a $21.6 million mortgage loan. The property was formerly occupied by tech firm Tintri as a single tenant through October 2018 when the company vacated. The vacant building was acquired by a joint venture between BioScience Properties Inc. and Harrison Street Real Estate Capital LCC for $40.75 million in February 2021 with a plan to reposition the building for life science use. CBRE has the listing and is marketing the space for flex, R&D, and life science use. The mortgage loan been current in payment despite 0% occupancy and negative net cash flow over the past few years. 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 Name	Tintri Mountain View
Address	^{303 Ravendale Drive Mountain View, CA 94043}
Outstanding Balance	$21,647,495
Interest Rate	4.39%
Maturity Date	8/5/2024
Most Recent Appraisal	$32,700,000
Most Recent Appraisal Date	5/14/2014

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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October 2021 Delinquency Report

CRED iQ

October 4, 2021

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.

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-2021-10-1 Download

MSA – Property Type	DQ or SS (millions)	DQ/SS (%)	Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA	$19.4	0.6%	0.01%
Hotel	$0.0	0.0%	0.00%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$19.4	5.1%	0.00%
Self Storage	$0.0	0.0%	0.00%
Atlanta-Sandy Springs-Marietta, GA MSA	$745.8	3.2%	0.04%
Hotel	$247.4	13.0%	0.03%
Industrial	$0.0	0.0%	0.00%
Multifamily	$4.7	0.0%	0.00%
Office	$34.0	1.4%	0.21%
Other	$0.0	0.0%	0.00%
Retail	$459.7	17.0%	-0.10%
Self Storage	$0.0	0.0%	0.00%
Austin-Round Rock, TX MSA	$528.6	5.7%	-0.24%
Hotel	$419.1	45.1%	0.42%
Industrial	$0.0	0.0%	0.00%
Multifamily	$1.5	0.0%	-0.55%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$105.5	15.7%	0.13%
Self Storage	$2.6	2.2%	0.13%
Baltimore-Towson, MD MSA	$416.6	4.3%	-0.34%
Hotel	$128.5	28.7%	0.89%
Industrial	$0.0	0.0%	0.00%
Multifamily	$8.8	0.1%	0.04%
Office	$22.9	3.6%	0.01%
Other	$0.0	0.0%	0.00%
Retail	$256.4	24.3%	-2.25%
Self Storage	$0.0	0.0%	0.00%
Birmingham-Hoover, AL MSA	$46.7	1.7%	-0.11%
Hotel	$22.6	22.4%	0.99%
Industrial	$0.0	0.0%	0.00%
Multifamily	$1.1	0.1%	0.10%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$22.9	3.2%	0.00%
Self Storage	$0.0	0.0%	0.00%
Boston-Cambridge-Quincy, MA-NH MSA	$384.8	2.2%	0.14%
Hotel	$127.0	16.7%	2.39%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$257.8	13.2%	0.20%
Self Storage	$0.0	0.0%	0.00%
Bridgeport-Stamford-Norwalk, CT MSA	$189.9	4.9%	-0.77%
Hotel	$63.6	51.4%	-0.34%
Industrial	$17.8	13.7%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$63.2	5.3%	-2.64%
Other	$23.6	5.8%	0.00%
Retail	$21.7	6.9%	0.82%
Self Storage	$0.0	0.0%	0.00%
Charlotte-Gastonia-Concord, NC-SC MSA	$243.4	3.1%	-1.24%
Hotel	$118.7	10.5%	-0.08%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$21.3	2.4%	-0.02%
Other	$85.0	24.2%	-1.64%
Retail	$18.4	1.7%	-6.21%
Self Storage	$0.0	0.0%	0.00%
Chicago-Naperville-Joliet, IL-IN-WI MSA	$1,998.5	7.4%	-0.33%
Hotel	$1,121.0	45.1%	-7.54%
Industrial	$0.0	0.0%	0.00%
Multifamily	$124.0	1.3%	-0.13%
Office	$393.0	5.6%	0.20%
Other	$101.2	5.1%	-0.82%
Retail	$259.3	7.7%	-1.36%
Self Storage	$0.0	0.0%	0.00%
Cincinnati-Middletown, OH-KY-IN MSA	$304.4	8.0%	-0.59%
Hotel	$141.0	46.3%	-0.03%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	-0.10%
Office	$11.5	2.2%	-0.12%
Other	$15.7	5.0%	-0.01%
Retail	$135.2	19.5%	-1.33%
Self Storage	$1.0	1.7%	0.09%
Cleveland-Elyria-Mentor, OH MSA	$503.6	12.4%	-1.95%
Hotel	$129.7	57.0%	-2.04%
Industrial	$0.0	0.0%	0.00%
Multifamily	$4.3	0.3%	0.27%
Office	$105.2	12.9%	0.27%
Other	$178.0	41.4%	1.10%
Retail	$86.4	11.4%	-9.24%
Self Storage	$0.0	0.0%	0.00%
Columbus, OH MSA	$251.9	4.3%	0.06%
Hotel	$84.4	26.8%	0.05%
Industrial	$11.9	2.8%	-0.02%
Multifamily	$4.3	0.1%	0.00%
Office	$12.5	2.8%	0.42%
Other	$0.0	0.0%	0.00%
Retail	$127.8	15.1%	0.05%
Self Storage	$11.0	18.9%	1.03%
Dallas-Fort Worth-Arlington, TX MSA	$926.2	2.7%	-0.34%
Hotel	$437.6	12.2%	-0.12%
Industrial	$1.7	0.1%	0.00%
Multifamily	$47.7	0.2%	0.00%
Office	$166.3	4.7%	-0.89%
Other	$23.8	1.1%	-0.26%
Retail	$237.1	9.5%	-2.37%
Self Storage	$11.9	2.4%	0.14%
Denver-Aurora, CO MSA	$312.3	1.9%	-0.11%
Hotel	$43.3	5.2%	0.20%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$194.6	9.4%	0.10%
Other	$7.0	1.4%	0.17%
Retail	$64.1	4.2%	-1.54%
Self Storage	$3.3	2.0%	0.19%
Detroit-Warren-Livonia, MI MSA	$522.0	5.9%	-0.87%
Hotel	$308.5	42.6%	0.98%
Industrial	$45.9	8.5%	-0.06%
Multifamily	$38.8	1.1%	-0.12%
Office	$0.0	0.0%	-0.40%
Other	$22.4	3.5%	0.10%
Retail	$106.4	6.5%	-3.61%
Self Storage	$0.0	0.0%	0.00%
Hartford-West Hartford-East Hartford, CT MSA	$211.9	8.6%	-0.03%
Hotel	$89.1	62.7%	2.15%
Industrial	$0.0	0.0%	0.00%
Multifamily	$3.8	0.3%	0.00%
Office	$87.6	22.2%	0.02%
Other	$1.2	0.6%	0.00%
Retail	$30.3	12.8%	0.25%
Self Storage	$0.0	0.0%	0.00%
Houston-Sugar Land-Baytown, TX MSA	$1,427.1	5.2%	-0.16%
Hotel	$693.4	59.2%	-0.41%
Industrial	$4.2	0.6%	-1.01%
Multifamily	$67.6	0.5%	-0.09%
Office	$541.0	13.7%	0.22%
Other	$1.5	0.0%	-0.84%
Retail	$89.4	2.4%	-0.21%
Self Storage	$29.9	6.3%	0.54%
Indianapolis-Carmel, IN MSA	$389.2	7.8%	-0.17%
Hotel	$163.1	25.9%	-0.69%
Industrial	$0.0	0.0%	0.00%
Multifamily	$98.2	4.2%	-0.33%
Office	$75.9	12.7%	2.11%
Other	$9.8	4.5%	-0.13%
Retail	$38.1	7.1%	0.06%
Self Storage	$4.1	5.3%	0.11%
Jacksonville, FL MSA	$67.6	1.3%	-0.02%
Hotel	$38.6	9.2%	0.33%
Industrial	$0.0	0.0%	0.00%
Multifamily	$20.0	0.6%	-0.01%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$9.0	2.1%	0.00%
Self Storage	$0.0	0.0%	0.00%
Kansas City, MO-KS MSA	$150.4	3.2%	-0.33%
Hotel	$85.0	27.0%	-4.14%
Industrial	$0.0	0.0%	0.00%
Multifamily	$7.6	0.3%	-0.01%
Office	$0.0	0.0%	0.00%
Other	$2.8	1.0%	-0.26%
Retail	$53.3	8.3%	0.14%
Self Storage	$1.7	0.8%	0.05%
Las Vegas-Paradise, NV MSA	$393.4	2.0%	0.01%
Hotel	$18.3	0.3%	0.00%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$10.2	1.7%	0.02%
Other	$0.0	0.0%	0.00%
Retail	$362.0	7.6%	0.02%
Self Storage	$2.8	1.4%	0.09%
Los Angeles-Long Beach-Santa Ana, CA MSA	$1,943.5	4.0%	-0.10%
Hotel	$665.9	16.5%	0.64%
Industrial	$0.0	0.0%	-0.18%
Multifamily	$124.5	0.6%	-0.05%
Office	$389.3	3.3%	0.19%
Other	$170.6	5.6%	-0.91%
Retail	$589.7	8.8%	-0.62%
Self Storage	$3.5	0.4%	0.00%
Louisville/Jefferson County, KY-IN MSA	$631.7	20.2%	-0.19%
Hotel	$242.9	56.1%	1.93%
Industrial	$0.0	0.0%	0.00%
Multifamily	$3.8	0.3%	-0.01%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$385.0	59.1%	0.05%
Self Storage	$0.0	0.0%	0.00%
Memphis, TN-AR-MS MSA	$156.7	6.5%	0.00%
Hotel	$56.3	29.0%	1.53%
Industrial	$0.0	0.0%	0.00%
Multifamily	$17.8	1.7%	-0.01%
Office	$0.0	0.0%	0.00%
Other	$18.4	33.6%	-0.18%
Retail	$62.6	15.4%	0.03%
Self Storage	$1.7	1.1%	0.06%
Miami-Fort Lauderdale-Pompano Beach, FL MSA	$682.4	3.2%	-0.70%
Hotel	$375.5	8.5%	0.25%
Industrial	$0.0	0.0%	0.00%
Multifamily	$6.7	0.1%	0.01%
Office	$21.6	1.1%	0.01%
Other	$8.7	0.6%	0.01%
Retail	$269.9	5.7%	-3.18%
Self Storage	$0.0	0.0%	0.00%
Milwaukee-Waukesha-West Allis, WI MSA	$254.9	10.4%	-0.02%
Hotel	$35.7	23.1%	-0.01%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$66.3	11.8%	0.19%
Other	$0.0	0.0%	0.00%
Retail	$153.0	30.5%	0.00%
Self Storage	$0.0	0.0%	0.00%
Minneapolis-St. Paul-Bloomington, MN-WI MSA	$1,934.7	23.5%	0.12%
Hotel	$332.3	53.8%	1.24%
Industrial	$4.1	1.5%	-0.03%
Multifamily	$0.0	0.0%	0.00%
Office	$155.0	7.7%	0.31%
Other	$11.7	2.8%	-0.14%
Retail	$1,431.8	71.1%	0.52%
Self Storage	$0.0	0.0%	0.00%
Nashville-Davidson-Murfreesboro-Franklin, TN MSA	$222.0	3.5%	-2.17%
Hotel	$212.5	15.8%	-9.00%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$9.5	1.2%	-0.33%
Self Storage	$0.0	0.0%	0.00%
New Orleans-Metairie-Kenner, LA MSA	$432.7	13.2%	-1.17%
Hotel	$396.6	37.4%	-3.07%
Industrial	$0.0	0.0%	0.00%
Multifamily	$13.4	1.7%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$22.8	3.1%	0.21%
Self Storage	$0.0	0.0%	0.00%
New York-Northern New Jersey-Long Island, NY-NJ-PA MSA	$6,558.7	5.6%	-0.06%
Hotel	$1,718.2	46.4%	-3.41%
Industrial	$7.5	0.4%	0.00%
Multifamily	$580.7	1.8%	0.19%
Office	$792.9	1.9%	0.17%
Other	$1,541.6	7.4%	-0.44%
Retail	$1,917.8	13.9%	0.13%
Self Storage	$0.0	0.0%	0.00%
Orlando-Kissimmee, FL MSA	$445.5	3.9%	-0.20%
Hotel	$169.8	6.0%	-0.49%
Industrial	$0.0	0.0%	0.00%
Multifamily	$25.4	0.4%	0.00%
Office	$47.1	9.6%	0.01%
Other	$0.0	0.0%	0.00%
Retail	$203.2	23.6%	3.08%
Self Storage	$0.0	0.0%	0.00%
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA	$934.1	5.1%	-0.25%
Hotel	$340.3	36.6%	-4.31%
Industrial	$0.0	0.0%	0.00%
Multifamily	$117.4	1.3%	-0.02%
Office	$57.6	1.5%	0.23%
Other	$57.1	4.2%	-1.44%
Retail	$361.6	14.3%	0.06%
Self Storage	$0.0	0.0%	0.00%
Phoenix-Mesa-Scottsdale, AZ MSA	$428.3	2.4%	-0.62%
Hotel	$57.6	3.6%	-1.27%
Industrial	$10.2	1.9%	0.04%
Multifamily	$0.0	0.0%	0.00%
Office	$23.8	1.1%	-0.02%
Other	$180.5	24.1%	0.02%
Retail	$156.3	7.2%	-0.26%
Self Storage	$0.0	0.0%	0.00%
Pittsburgh, PA MSA	$196.0	4.2%	-0.03%
Hotel	$123.6	45.8%	2.91%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$15.4	1.7%	0.00%
Other	$8.1	2.1%	0.02%
Retail	$48.9	7.1%	-0.17%
Self Storage	$0.0	0.0%	0.00%
Portland-Vancouver-Beaverton, OR-WA MSA	$514.7	7.9%	-0.31%
Hotel	$502.9	62.7%	3.51%
Industrial	$0.0	0.0%	0.00%
Multifamily	$10.2	0.2%	-0.01%
Office	$1.6	0.5%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$0.0	0.0%	0.00%
Self Storage	$0.0	0.0%	0.00%
Raleigh-Cary, NC MSA	$135.1	3.3%	0.02%
Hotel	$86.6	21.1%	1.92%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$12.7	4.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$35.8	9.1%	0.95%
Self Storage	$0.0	0.0%	0.00%
Richmond, VA MSA	$141.7	4.1%	-0.09%
Hotel	$50.6	17.8%	0.00%
Industrial	$6.9	4.8%	-0.01%
Multifamily	$0.0	0.0%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$84.3	15.3%	0.00%
Self Storage	$0.0	0.0%	0.00%
Riverside-San Bernardino-Ontario, CA MSA	$331.1	3.5%	-0.66%
Hotel	$84.8	18.4%	1.27%
Industrial	$0.0	0.0%	0.00%
Multifamily	$2.4	0.1%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$243.9	11.1%	-2.76%
Self Storage	$0.0	0.0%	0.00%
Sacramento-Arden-Arcade-Roseville, CA MSA	$31.0	0.6%	-0.01%
Hotel	$6.3	1.7%	0.00%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$11.0	1.9%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$13.7	1.8%	-0.05%
Self Storage	$0.0	0.0%	0.00%
Salt Lake City, UT MSA	$32.3	0.9%	-4.16%
Hotel	$32.3	10.7%	-4.56%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$0.0	0.0%	-29.87%
Self Storage	$0.0	0.0%	0.00%
San Antonio, TX MSA	$193.3	3.0%	-0.13%
Hotel	$26.2	7.8%	0.07%
Industrial	$0.0	0.0%	0.00%
Multifamily	$13.1	0.3%	0.12%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	-0.24%
Retail	$152.5	17.3%	-1.47%
Self Storage	$1.5	0.9%	0.07%
San Diego-Carlsbad-San Marcos, CA MSA	$217.2	2.0%	-0.19%
Hotel	$79.5	3.9%	0.17%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	-0.19%
Office	$0.0	0.0%	0.00%
Other	$20.8	3.4%	0.06%
Retail	$117.0	10.0%	-0.26%
Self Storage	$0.0	0.0%	0.00%
San Francisco-Oakland-Fremont, CA MSA	$332.3	1.5%	-0.02%
Hotel	$212.0	9.1%	0.16%
Industrial	$0.0	0.0%	0.00%
Multifamily	$23.1	0.3%	0.00%
Office	$18.9	0.2%	-0.01%
Other	$30.6	1.7%	0.01%
Retail	$47.8	3.6%	0.00%
Self Storage	$0.0	0.0%	0.00%
San Jose-Sunnyvale-Santa Clara, CA MSA	$137.1	1.0%	-0.27%
Hotel	$122.3	6.1%	-1.59%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$14.7	0.2%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$0.0	0.0%	0.00%
Self Storage	$0.0	0.0%	0.00%
Seattle-Tacoma-Bellevue, WA MSA	$201.9	1.2%	-0.26%
Hotel	$195.1	15.5%	-2.47%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$6.8	0.4%	0.00%
Self Storage	$0.0	0.0%	0.00%
St. Louis, MO-IL MSA	$422.6	9.7%	0.06%
Hotel	$58.6	20.6%	-0.01%
Industrial	$0.0	0.0%	0.00%
Multifamily	$23.3	1.4%	-0.01%
Office	$107.0	19.1%	-0.06%
Other	$24.7	4.9%	0.01%
Retail	$209.0	20.5%	0.37%
Self Storage	$0.0	0.0%	0.00%
Tampa-St. Petersburg-Clearwater, FL	$385.8	4.2%	0.23%
Hotel	$74.9	6.5%	0.18%
Industrial	$0.0	0.0%	0.00%
Multifamily	$34.7	0.6%	0.01%
Office	$20.3	3.4%	-0.65%
Other	$0.0	0.0%	0.00%
Retail	$256.0	27.4%	8.65%
Self Storage	$0.0	0.0%	0.00%
Tucson, AZ MSA	$265.2	9.2%	1.73%
Hotel	$1.4	0.5%	0.00%
Industrial	$0.0	0.0%	0.00%
Multifamily	$0.0	0.0%	0.00%
Office	$0.0	0.0%	0.00%
Other	$0.0	0.0%	0.00%
Retail	$263.8	39.5%	20.83%
Self Storage	$0.0	0.0%	0.00%
Virginia Beach-Norfolk-Newport News, VA-NC MSA	$155.6	3.6%	-2.17%
Hotel	$24.6	5.3%	0.04%
Industrial	$21.2	13.1%	0.01%
Multifamily	$0.0	0.0%	0.00%
Office	$12.4	3.0%	-0.02%
Other	$0.0	0.0%	0.00%
Retail	$97.3	11.9%	-8.71%
Self Storage	$0.0	0.0%	-9.91%
Washington-Arlington-Alexandria, DC-VA-MD-WV MSA	$787.0	2.8%	-0.75%
Hotel	$59.1	5.3%	-0.01%
Industrial	$0.0	0.0%	0.00%
Multifamily	$1.3	0.0%	0.00%
Office	$309.1	4.5%	-3.42%
Other	$249.7	12.3%	-0.16%
Retail	$167.9	5.4%	0.02%
Self Storage	$0.0	0.0%	0.00%
Grand Total	$29,139.0	4.4%	-0.28%

Specially Serviced Loans

CRED iQ

September 28, 2021

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 Name	Park City Center
Address	^{142 Park City Center Lancaster, PA 17601}
Outstanding Balance	$115,500,000
Interest Rate	4.11%
Maturity Date	9/9/2021
Most Recent Appraisal	$254,400,000
Most Recent Appraisal Date	6/27/2019

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 Name	428 Broadway
Address	^{428 Broadway New York, NY 10013}
Outstanding Balance	$60,000,000
Interest Rate	4.90%
Maturity Date	4/9/2023
Most Recent Appraisal	$95,000,000
Most Recent Appraisal Date	2/6/2018

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 Name	Shops At Mauna Lani
Address	^{68-1330 Mauna Lani Drive Waimea, HI 96743}
Outstanding Balance	$19,625,000
Interest Rate	8.00%
Maturity Date	4/1/2021
Most Recent Appraisal	$30,950,000
Most Recent Appraisal Date	3/1/2019

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 Name	394 Broadway
Address	^{394 Broadway New York, NY 10013}
Outstanding Balance	$18,650,000
Interest Rate	5.41%
Maturity Date	4/1/2029
Most Recent Appraisal	$29,500,000
Most Recent Appraisal Date	1/14/2019

1049 5^th 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 Name	1049 5th Avenue
Address	^{1049 5th Avenue New York, NY 10028}
Outstanding Balance	$4,500,000
Interest Rate	4.32%
Maturity Date	1/1/2031
Most Recent Appraisal	$10,800,000
Most Recent Appraisal Date	8/24/2020

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Recent Commercial Mortgage Originations

CRED iQ

September 21, 2021

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
Name	Parkway Irvine
Address	15375 Barranca Parkway Irvine, CA 92618
Type	Industrial
Subtype	Flex
Building Size	209,831 sf
Year Built	1989
Submarket	Irvine Spectrum
County	Orange
MSA	Los Angeles-Long Beach-Santa Ana, CA
Origination Date	08/30/2021
Loan Amount	$37,000,000
Interest Rate	3.13%
Valuation
Appraisal Value	$62,400,000
Appraisal Date	07/23/2021
Appraisal LTV	59.30%
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 24^th 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
Name	15-17 Park Ave
Address	15-17 Park Avenue New York, NY 10016
Type	Multifamily
Subtype	High Rise
Building Size	97 units
Year Built	1924
Submarket	Murray Hill
County	New York
MSA	New York-Northern New Jersey-Long Island, NY-NJ-PA
Origination Date	08/16/2021
Loan Amount	$31,000,000
Interest Rate	3.34%
Valuation
Appraisal Value	$50,100,000
Appraisal Date	07/08/2021
Appraisal LTV	61.90%
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
Name	Murrieta Spectrum
Address	25125 Madison Avenue Murrieta, CA 92562
Type	Retail
Subtype	Community Center
Building Size	172,357 sf
Year Built	2005
Submarket	Temecula
County	Riverside
MSA	Riverside-San Bernardino-Ontario, CA
Origination Date	08/27/2021
Loan Amount	$23,000,000
Interest Rate	3.73%
Valuation
Appraisal Value	$45,250,000
Appraisal Date	04/22/2021
Appraisal LTV	50.90%
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
Name	Nanogate North America
Address	150 East Longview Avenue Mansfield, OH 44903
Type	Industrial
Subtype	Manufacturing
Building Size	266,180 sf
Year Built	1947
Submarket	Mansfield
County	Richland
MSA	Mansfield, OH
Origination Date	08/20/2021
Loan Amount	$9,500,000
Interest Rate	4.20%
Valuation
Appraisal Value	$15,250,000
Appraisal Date	06/17/2021
Appraisal LTV	62.30%
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
Name	Westgate Shopping Center
Address	7311 San Pedro Avenue San Antonio, TX 78216
Type	Retail
Subtype	Community Center
Building Size	47,331 sf
Year Built	1965
Submarket	Airport
County	Bexar
MSA	San Antonio, TX
Origination Date	08/07/2021
Loan Amount	$7,200,000
Interest Rate	4.06%
Valuation
Appraisal Value	$10,400,000
Appraisal Date	07/15/2021
Appraisal LTV	69.20%
MyQ Concluded Value	$9,700,000

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Distressed Ginnie Mae Properties

CRED iQ

September 14, 2021

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 56^th

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 56^th 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.

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Washington Prime Group Properties

CRED iQ

September 8, 2021

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 3^rd WAR Report. This week’s updated valuations aim to provide guidance for WPG properties with the highest amounts of outstanding mortgage debt.

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 5^th 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.

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September 2021 Delinquency Report

CRED iQ

September 2, 2021

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-2021-1 Download

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 Type	DQ/SS (millions)	DQ/SS (%)	Monthly Change
Allentown-Bethlehem-Easton, PA-NJ MSA	$19.4	0.6%	0.00%
Allentown – Hotel	$0.0	0.0%	0.00%
Allentown – Industrial	$0.0	0.0%	0.00%
Allentown – Multifamily	$0.0	0.0%	0.00%
Allentown – Office	$0.0	0.0%	0.00%
Allentown – Other	$0.0	0.0%	0.00%
Allentown – Retail	$19.4	5.1%	0.00%
Allentown – Self Storage	$0.0	0.0%	0.00%
Atlanta – Atlanta-Sandy Springs-Marietta, GA MSA	$749.3	3.1%	-0.16%
Atlanta – Hotel	$247.7	12.9%	-0.01%
Atlanta – Industrial	$0.0	0.0%	0.00%
Atlanta – Multifamily	$4.7	0.0%	-0.29%
Atlanta – Office	$34.0	1.2%	0.02%
Atlanta – Other	$0.0	0.0%	0.00%
Atlanta – Retail	$462.9	17.1%	0.00%
Atlanta – Self Storage	$0.0	0.0%	0.00%
Austin – Austin-Round Rock, TX MSA	$563.4	6.0%	0.51%
Austin – Hotel	$419.3	44.6%	-0.08%
Austin – Industrial	$0.0	0.0%	0.00%
Austin – Multifamily	$36.0	0.6%	0.51%
Austin – Office	$0.0	0.0%	0.00%
Austin – Other	$0.0	0.0%	0.00%
Austin – Retail	$105.6	15.6%	3.22%
Austin – Self Storage	$2.5	2.1%	0.00%
Baltimore – Baltimore-Towson, MD MSA	$448.3	4.6%	-0.17%
Baltimore – Hotel	$128.7	27.8%	-2.92%
Baltimore – Industrial	$0.0	0.0%	0.00%
Baltimore – Multifamily	$6.1	0.1%	0.06%
Baltimore – Office	$23.0	3.6%	0.00%
Baltimore – Other	$0.0	0.0%	0.00%
Baltimore – Retail	$290.6	26.5%	0.02%
Baltimore – Self Storage	$0.0	0.0%	0.00%
Birmingham – Birmingham-Hoover, AL MSA	$45.6	1.8%	-0.10%
Birmingham – Hotel	$22.7	21.4%	0.08%
Birmingham – Industrial	$0.0	0.0%	0.00%
Birmingham – Multifamily	$0.0	0.0%	-0.19%
Birmingham – Office	$0.0	0.0%	0.00%
Birmingham – Other	$0.0	0.0%	0.00%
Birmingham – Retail	$23.0	3.2%	-0.02%
Birmingham – Self Storage	$0.0	0.0%	0.00%
Boston – Boston-Cambridge-Quincy, MA-NH MSA	$367.1	2.1%	-0.14%
Boston – Hotel	$110.8	14.4%	1.56%
Boston – Industrial	$0.0	0.0%	0.00%
Boston – Multifamily	$0.0	0.0%	0.00%
Boston – Office	$0.0	0.0%	0.00%
Boston – Other	$0.0	0.0%	0.00%
Boston – Retail	$256.3	13.0%	-1.67%
Boston – Self Storage	$0.0	0.0%	0.00%
Bridgeport – Bridgeport-Stamford-Norwalk, CT MSA	$224.3	5.6%	-1.02%
Bridgeport – Hotel	$63.7	51.7%	0.43%
Bridgeport – Industrial	$17.8	13.6%	0.71%
Bridgeport – Multifamily	$0.0	0.0%	0.00%
Bridgeport – Office	$97.5	7.9%	-3.08%
Bridgeport – Other	$23.6	5.8%	0.00%
Bridgeport – Retail	$21.7	6.1%	-0.29%
Bridgeport – Self Storage	$0.0	0.0%	0.00%
Charlotte – Charlotte-Gastonia-Concord, NC-SC MSA	$352.5	4.4%	0.06%
Charlotte – Hotel	$130.0	10.6%	1.49%
Charlotte – Industrial	$0.0	0.0%	0.00%
Charlotte – Multifamily	$0.0	0.0%	0.00%
Charlotte – Office	$21.3	2.5%	0.00%
Charlotte – Other	$92.6	25.9%	0.47%
Charlotte – Retail	$108.7	7.9%	0.10%
Charlotte – Self Storage	$0.0	0.0%	0.00%
Chicago – Chicago-Naperville-Joliet, IL-IN-WI MSA	$2,067.5	7.8%	-1.43%
Chicago – Hotel	$1,121.8	52.6%	3.00%
Chicago – Industrial	$0.0	0.0%	-0.19%
Chicago – Multifamily	$134.4	1.4%	-0.50%
Chicago – Office	$386.5	5.4%	-4.45%
Chicago – Other	$117.9	5.9%	0.13%
Chicago – Retail	$306.9	9.1%	-0.80%
Chicago – Self Storage	$0.0	0.0%	0.00%
Cincinnati – Cincinnati-Middletown, OH-KY-IN MSA	$318.4	8.5%	-0.07%
Cincinnati – Hotel	$141.2	46.3%	0.00%
Cincinnati – Industrial	$0.0	0.0%	0.00%
Cincinnati – Multifamily	$1.6	0.1%	-0.04%
Cincinnati – Office	$11.5	2.3%	-0.11%
Cincinnati – Other	$15.7	5.0%	-0.07%
Cincinnati – Retail	$147.4	20.9%	0.19%
Cincinnati – Self Storage	$1.0	1.6%	0.00%
Cleveland – Cleveland-Elyria-Mentor, OH MSA	$596.9	14.3%	0.02%
Cleveland – Hotel	$135.4	59.0%	-0.04%
Cleveland – Industrial	$0.0	0.0%	0.00%
Cleveland – Multifamily	$0.0	0.0%	-0.37%
Cleveland – Office	$105.3	12.6%	-0.01%
Cleveland – Other	$173.5	40.3%	3.69%
Cleveland – Retail	$182.6	20.6%	-0.04%
Cleveland – Self Storage	$0.0	0.0%	0.00%
Columbus, OH – Columbus, OH MSA	$251.8	4.2%	-0.16%
Columbus, OH – Hotel	$84.6	26.8%	0.30%
Columbus, OH – Industrial	$11.9	2.8%	-0.01%
Columbus, OH – Multifamily	$4.3	0.1%	-0.27%
Columbus, OH – Office	$12.5	2.4%	0.00%
Columbus, OH – Other	$0.0	0.0%	0.00%
Columbus, OH – Retail	$128.0	15.0%	0.10%
Columbus, OH – Self Storage	$10.4	17.9%	0.03%
Dallas – Dallas-Fort Worth-Arlington, TX MSA	$1,040.5	3.1%	0.03%
Dallas – Hotel	$443.8	12.3%	-0.42%
Dallas – Industrial	$1.7	0.1%	0.00%
Dallas – Multifamily	$47.7	0.2%	-0.01%
Dallas – Office	$212.1	5.6%	1.06%
Dallas – Other	$23.9	1.4%	-0.20%
Dallas – Retail	$300.1	11.9%	0.34%
Dallas – Self Storage	$11.2	2.2%	0.11%
Denver – Denver-Aurora, CO MSA	$334.8	2.0%	-0.31%
Denver – Hotel	$43.4	5.0%	-3.39%
Denver – Industrial	$0.0	0.0%	0.00%
Denver – Multifamily	$0.0	0.0%	-0.03%
Denver – Office	$194.4	9.3%	-0.90%
Denver – Other	$7.0	1.2%	0.06%
Denver – Retail	$87.0	5.7%	-0.15%
Denver – Self Storage	$3.1	1.8%	0.00%
Detroit – Detroit-Warren-Livonia, MI MSA	$608.2	6.8%	0.19%
Detroit – Hotel	$316.7	41.6%	0.05%
Detroit – Industrial	$45.9	8.5%	1.05%
Detroit – Multifamily	$42.5	1.3%	0.20%
Detroit – Office	$6.6	0.4%	0.40%
Detroit – Other	$22.5	3.4%	0.06%
Detroit – Retail	$174.1	10.1%	-0.10%
Detroit – Self Storage	$0.0	0.0%	0.00%
Hartford – Hartford-West Hartford-East Hartford, CT MSA	$212.1	8.6%	-0.64%
Hartford – Hotel	$89.2	60.6%	-3.65%
Hartford – Industrial	$0.0	0.0%	0.00%
Hartford – Multifamily	$3.9	0.3%	-0.55%
Hartford – Office	$87.6	22.2%	0.02%
Hartford – Other	$1.2	0.6%	0.01%
Hartford – Retail	$30.3	12.6%	-0.42%
Hartford – Self Storage	$0.0	0.0%	0.00%
Houston – Houston-Sugar Land-Baytown, TX MSA	$1,485.5	5.3%	-0.90%
Houston – Hotel	$705.7	59.6%	-0.33%
Houston – Industrial	$10.9	1.6%	0.07%
Houston – Multifamily	$80.8	0.6%	-0.32%
Houston – Office	$528.2	13.5%	-0.78%
Houston – Other	$33.9	0.9%	-2.97%
Houston – Retail	$97.9	2.6%	-0.20%
Houston – Self Storage	$28.2	5.8%	0.18%
Indianapolis – Indianapolis-Carmel, IN MSA	$386.2	8.0%	-1.03%
Indianapolis – Hotel	$169.2	26.6%	0.01%
Indianapolis – Industrial	$0.0	0.0%	0.00%
Indianapolis – Multifamily	$97.2	4.5%	-0.51%
Indianapolis – Office	$67.8	10.6%	-0.60%
Indianapolis – Other	$9.8	4.6%	-0.15%
Indianapolis – Retail	$38.2	7.0%	-2.15%
Indianapolis – Self Storage	$4.0	5.2%	0.00%
Jacksonville – Jacksonville, FL MSA	$67.6	1.3%	-0.25%
Jacksonville – Hotel	$38.6	8.9%	-2.20%
Jacksonville – Industrial	$0.0	0.0%	0.00%
Jacksonville – Multifamily	$20.0	0.6%	-0.09%
Jacksonville – Office	$0.0	0.0%	0.00%
Jacksonville – Other	$0.0	0.0%	0.00%
Jacksonville – Retail	$9.1	2.1%	0.00%
Jacksonville – Self Storage	$0.0	0.0%	0.00%
Kansas City – Kansas City, MO-KS MSA	$163.2	3.5%	-4.66%
Kansas City – Hotel	$97.9	31.1%	-16.55%
Kansas City – Industrial	$0.0	0.0%	0.00%
Kansas City – Multifamily	$7.6	0.3%	-0.01%
Kansas City – Office	$0.0	0.0%	-18.21%
Kansas City – Other	$2.8	1.2%	-0.88%
Kansas City – Retail	$53.3	8.2%	2.39%
Kansas City – Self Storage	$1.6	0.8%	0.00%
Las Vegas – Las Vegas-Paradise, NV MSA	$393.8	2.0%	-0.34%
Las Vegas – Hotel	$18.3	0.3%	0.00%
Las Vegas – Industrial	$0.0	0.0%	0.00%
Las Vegas – Multifamily	$0.0	0.0%	0.00%
Las Vegas – Office	$10.2	1.7%	0.06%
Las Vegas – Other	$0.0	0.0%	0.00%
Las Vegas – Retail	$362.6	7.5%	-1.43%
Las Vegas – Self Storage	$2.6	1.4%	0.05%
Los Angeles – Los Angeles-Long Beach-Santa Ana, CA MSA	$1,997.4	4.1%	-0.89%
Los Angeles – Hotel	$647.4	15.8%	-9.11%
Los Angeles – Industrial	$2.0	0.2%	0.00%
Los Angeles – Multifamily	$133.5	0.6%	0.02%
Los Angeles – Office	$368.7	3.1%	0.00%
Los Angeles – Other	$197.7	6.5%	-1.56%
Los Angeles – Retail	$644.6	9.4%	0.13%
Los Angeles – Self Storage	$3.5	0.4%	0.36%
Louisville – Louisville/Jefferson County, KY-IN MSA	$632.8	20.4%	0.09%
Louisville – Hotel	$243.0	54.2%	0.03%
Louisville – Industrial	$0.0	0.0%	0.00%
Louisville – Multifamily	$3.8	0.3%	0.00%
Louisville – Office	$0.0	0.0%	0.00%
Louisville – Other	$0.0	0.0%	0.00%
Louisville – Retail	$386.1	59.1%	0.14%
Louisville – Self Storage	$0.0	0.0%	0.00%
Memphis – Memphis, TN-AR-MS MSA	$156.8	6.5%	-1.90%
Memphis – Hotel	$56.3	27.5%	0.20%
Memphis – Industrial	$0.0	0.0%	0.00%
Memphis – Multifamily	$17.8	1.7%	-0.66%
Memphis – Office	$0.0	0.0%	-11.38%
Memphis – Other	$18.4	33.7%	1.83%
Memphis – Retail	$62.7	15.3%	0.05%
Memphis – Self Storage	$1.6	1.0%	0.00%
Miami – Miami-Fort Lauderdale-Pompano Beach, FL MSA	$843.2	3.9%	-0.76%
Miami – Hotel	$375.7	8.2%	0.04%
Miami – Industrial	$0.0	0.0%	0.00%
Miami – Multifamily	$5.8	0.1%	-0.04%
Miami – Office	$21.7	1.1%	-2.68%
Miami – Other	$8.7	0.6%	-4.20%
Miami – Retail	$431.4	8.9%	-0.72%
Miami – Self Storage	$0.0	0.0%	0.00%
Milwaukee – Milwaukee-Waukesha-West Allis, WI MSA	$255.4	10.5%	-0.09%
Milwaukee – Hotel	$35.7	23.1%	-0.01%
Milwaukee – Industrial	$0.0	0.0%	0.00%
Milwaukee – Multifamily	$0.0	0.0%	0.00%
Milwaukee – Office	$66.4	11.6%	0.00%
Milwaukee – Other	$0.0	0.0%	0.00%
Milwaukee – Retail	$153.2	30.5%	0.23%
Milwaukee – Self Storage	$0.0	0.0%	0.00%
Minneapolis – Minneapolis-St. Paul-Bloomington, MN-WI MSA	$1,932.3	23.3%	-2.99%
Minneapolis – Hotel	$332.5	52.6%	0.29%
Minneapolis – Industrial	$4.1	1.5%	-3.88%
Minneapolis – Multifamily	$0.0	0.0%	0.00%
Minneapolis – Office	$152.4	7.4%	-12.26%
Minneapolis – Other	$11.7	3.0%	0.17%
Minneapolis – Retail	$1,431.8	70.6%	0.78%
Minneapolis – Self Storage	$0.0	0.0%	0.00%
Nashville – Nashville-Davidson-Murfreesboro-Franklin, TN MSA	$351.4	5.6%	-0.28%
Nashville – Hotel	$339.2	24.8%	-1.11%
Nashville – Industrial	$0.0	0.0%	0.00%
Nashville – Multifamily	$0.0	0.0%	0.00%
Nashville – Office	$0.0	0.0%	0.00%
Nashville – Other	$0.0	0.0%	0.00%
Nashville – Retail	$12.1	1.6%	-0.01%
Nashville – Self Storage	$0.0	0.0%	0.00%
New Orleans – New Orleans-Metairie-Kenner, LA MSA	$487.4	14.3%	1.09%
New Orleans – Hotel	$451.1	40.4%	1.91%
New Orleans – Industrial	$0.0	0.0%	0.00%
New Orleans – Multifamily	$13.4	1.7%	0.00%
New Orleans – Office	$0.0	0.0%	0.00%
New Orleans – Other	$0.0	0.0%	0.00%
New Orleans – Retail	$22.9	2.9%	-0.01%
New Orleans – Self Storage	$0.0	0.0%	0.00%
New York City – New York-Northern New Jersey-Long Island, NY-NJ-PA MSA	$6,718.5	5.7%	0.15%
New York City – Hotel	$1,860.0	49.8%	-0.30%
New York City – Industrial	$7.5	0.5%	0.03%
New York City – Multifamily	$523.9	1.6%	0.12%
New York City – Office	$734.6	1.7%	-0.11%
New York City – Other	$1,636.6	7.8%	0.06%
New York City – Retail	$1,955.9	13.8%	-0.32%
New York City – Self Storage	$0.0	0.0%	0.00%
Orlando – Orlando-Kissimmee, FL MSA	$476.8	4.1%	-0.58%
Orlando – Hotel	$186.5	6.5%	-1.87%
Orlando – Industrial	$0.0	0.0%	0.00%
Orlando – Multifamily	$25.5	0.4%	0.01%
Orlando – Office	$47.1	9.6%	0.01%
Orlando – Other	$0.0	0.0%	0.00%
Orlando – Retail	$217.7	20.5%	-1.95%
Orlando – Self Storage	$0.0	0.0%	0.00%
Philadelphia – Philadelphia-Camden-Wilmington, PA-NJ-DE-MD MSA	$991.3	5.3%	0.05%
Philadelphia – Hotel	$380.3	40.9%	9.17%
Philadelphia – Industrial	$0.0	0.0%	0.00%
Philadelphia – Multifamily	$118.6	1.3%	0.00%
Philadelphia – Office	$51.1	1.2%	0.10%
Philadelphia – Other	$79.3	5.7%	-0.15%
Philadelphia – Retail	$362.0	14.2%	0.03%
Philadelphia – Self Storage	$0.0	0.0%	0.00%
Phoenix – Phoenix-Mesa-Scottsdale, AZ MSA	$594.7	3.1%	-0.38%
Phoenix – Hotel	$80.5	4.8%	-1.17%
Phoenix – Industrial	$10.2	1.9%	-0.02%
Phoenix – Multifamily	$0.0	0.0%	0.00%
Phoenix – Office	$23.8	1.1%	-2.13%
Phoenix – Other	$180.5	24.1%	0.42%
Phoenix – Retail	$299.7	7.5%	-0.11%
Phoenix – Self Storage	$0.0	0.0%	0.00%
Pittsburgh – Pittsburgh, PA MSA	$202.5	4.3%	-0.51%
Pittsburgh – Hotel	$125.3	42.9%	-5.99%
Pittsburgh – Industrial	$0.0	0.0%	0.00%
Pittsburgh – Multifamily	$0.0	0.0%	0.00%
Pittsburgh – Office	$15.4	1.7%	0.00%
Pittsburgh – Other	$8.1	2.1%	0.09%
Pittsburgh – Retail	$53.6	7.3%	0.11%
Pittsburgh – Self Storage	$0.0	0.0%	0.00%
Portland – Portland-Vancouver-Beaverton, OR-WA MSA	$532.7	8.2%	-0.74%
Portland – Hotel	$520.9	59.2%	-6.07%
Portland – Industrial	$0.0	0.0%	0.00%
Portland – Multifamily	$10.2	0.2%	0.00%
Portland – Office	$1.6	0.5%	0.00%
Portland – Other	$0.0	0.0%	0.00%
Portland – Retail	$0.0	0.0%	0.00%
Portland – Self Storage	$0.0	0.0%	0.00%
Raleigh – Raleigh-Cary, NC MSA	$135.2	3.3%	-0.92%
Raleigh – Hotel	$86.6	19.2%	-7.70%
Raleigh – Industrial	$0.0	0.0%	0.00%
Raleigh – Multifamily	$0.0	0.0%	0.00%
Raleigh – Office	$12.7	4.0%	0.00%
Raleigh – Other	$0.0	0.0%	0.00%
Raleigh – Retail	$35.8	8.1%	-1.24%
Raleigh – Self Storage	$0.0	0.0%	0.00%
Richmond – Richmond, VA MSA	$142.0	4.1%	-0.22%
Richmond – Hotel	$50.6	17.8%	0.29%
Richmond – Industrial	$6.9	4.9%	-0.12%
Richmond – Multifamily	$0.0	0.0%	-0.56%
Richmond – Office	$0.0	0.0%	0.00%
Richmond – Other	$0.0	0.0%	0.00%
Richmond – Retail	$84.4	15.3%	0.06%
Richmond – Self Storage	$0.0	0.0%	0.00%
Riverside – Riverside-San Bernardino-Ontario, CA MSA	$393.9	4.2%	-0.36%
Riverside – Hotel	$85.0	17.1%	-1.92%
Riverside – Industrial	$0.0	0.0%	0.00%
Riverside – Multifamily	$2.4	0.1%	-0.08%
Riverside – Office	$0.0	0.0%	0.00%
Riverside – Other	$0.0	0.0%	0.00%
Riverside – Retail	$306.5	13.9%	0.31%
Riverside – Self Storage	$0.0	0.0%	0.00%
Sacramento – Sacramento-Arden-Arcade-Roseville, CA MSA	$31.0	0.6%	0.00%
Sacramento – Hotel	$6.3	1.7%	0.00%
Sacramento – Industrial	$0.0	0.0%	0.00%
Sacramento – Multifamily	$0.0	0.0%	0.00%
Sacramento – Office	$11.0	1.9%	0.93%
Sacramento – Other	$0.0	0.0%	0.00%
Sacramento – Retail	$13.8	1.8%	-0.57%
Sacramento – Self Storage	$0.0	0.0%	0.00%
Salt Lake City – Salt Lake City, UT MSA	$187.0	5.1%	-0.25%
Salt Lake City – Hotel	$47.6	15.3%	-0.01%
Salt Lake City – Industrial	$0.0	0.0%	0.00%
Salt Lake City – Multifamily	$0.0	0.0%	0.00%
Salt Lake City – Office	$0.0	0.0%	-1.85%
Salt Lake City – Other	$0.0	0.0%	0.00%
Salt Lake City – Retail	$139.4	29.9%	0.07%
Salt Lake City – Self Storage	$0.0	0.0%	0.00%
San Antonio – San Antonio, TX MSA	$201.8	3.1%	0.00%
San Antonio – Hotel	$26.2	7.8%	0.29%
San Antonio – Industrial	$0.0	0.0%	0.00%
San Antonio – Multifamily	$8.2	0.2%	-0.01%
San Antonio – Office	$0.0	0.0%	-1.44%
San Antonio – Other	$0.4	0.2%	-0.24%
San Antonio – Retail	$165.6	18.8%	1.61%
San Antonio – Self Storage	$1.4	0.9%	0.00%
San Diego – San Diego-Carlsbad-San Marcos, CA MSA	$231.2	2.1%	-4.03%
San Diego – Hotel	$79.5	3.7%	-21.11%
San Diego – Industrial	$0.0	0.0%	0.00%
San Diego – Multifamily	$9.6	0.2%	0.01%
San Diego – Office	$0.0	0.0%	0.00%
San Diego – Other	$20.8	3.3%	0.01%
San Diego – Retail	$121.3	10.3%	0.19%
San Diego – Self Storage	$0.0	0.0%	0.00%
San Francisco – San Francisco-Oakland-Fremont, CA MSA	$331.9	1.5%	-5.76%
San Francisco – Hotel	$212.1	9.0%	0.37%
San Francisco – Industrial	$0.0	0.0%	0.00%
San Francisco – Multifamily	$22.6	0.3%	-17.77%
San Francisco – Office	$18.9	0.2%	-0.10%
San Francisco – Other	$30.6	1.7%	0.01%
San Francisco – Retail	$47.8	3.6%	-0.02%
San Francisco – Self Storage	$0.0	0.0%	0.00%
San Jose – San Jose-Sunnyvale-Santa Clara, CA MSA	$171.1	1.2%	0.00%
San Jose – Hotel	$156.4	7.7%	0.13%
San Jose – Industrial	$0.0	0.0%	0.00%
San Jose – Multifamily	$0.0	0.0%	0.00%
San Jose – Office	$14.7	0.2%	0.00%
San Jose – Other	$0.0	0.0%	0.00%
San Jose – Retail	$0.0	0.0%	0.00%
San Jose – Self Storage	$0.0	0.0%	0.00%
Seattle – Seattle-Tacoma-Bellevue, WA MSA	$245.0	1.4%	-0.30%
Seattle – Hotel	$238.2	18.0%	-2.61%
Seattle – Industrial	$0.0	0.0%	0.00%
Seattle – Multifamily	$0.0	0.0%	0.00%
Seattle – Office	$0.0	0.0%	0.00%
Seattle – Other	$0.0	0.0%	0.00%
Seattle – Retail	$6.8	0.4%	0.01%
Seattle – Self Storage	$0.0	0.0%	-2.41%
St. Louis – St. Louis, MO-IL MSA	$420.3	9.6%	-0.07%
St. Louis – Hotel	$58.6	20.6%	0.04%
St. Louis – Industrial	$0.0	0.0%	0.00%
St. Louis – Multifamily	$23.4	1.4%	0.00%
St. Louis – Office	$107.6	19.1%	0.02%
St. Louis – Other	$24.7	4.9%	-0.01%
St. Louis – Retail	$206.0	20.1%	-0.18%
St. Louis – Self Storage	$0.0	0.0%	0.00%
Tampa – Tampa-St. Petersburg-Clearwater, FL	$386.3	3.9%	-0.31%
Tampa – Hotel	$74.9	6.3%	0.00%
Tampa – Industrial	$0.0	0.0%	0.00%
Tampa – Multifamily	$34.7	0.6%	-0.06%
Tampa – Office	$24.1	4.1%	0.00%
Tampa – Other	$0.0	0.0%	0.00%
Tampa – Retail	$252.6	18.8%	-1.76%
Tampa – Self Storage	$0.0	0.0%	0.00%
Tucson – Tucson, AZ MSA	$267.4	7.5%	0.04%
Tucson – Hotel	$1.4	0.4%	0.00%
Tucson – Industrial	$0.0	0.0%	0.00%
Tucson – Multifamily	$0.0	0.0%	0.00%
Tucson – Office	$0.0	0.0%	0.00%
Tucson – Other	$0.0	0.0%	0.00%
Tucson – Retail	$266.0	18.6%	0.34%
Tucson – Self Storage	$0.0	0.0%	0.00%
Virginia Beach – Virginia Beach-Norfolk-Newport News, VA-NC MSA	$254.3	5.8%	-0.13%
Virginia Beach – Hotel	$24.7	5.3%	-2.98%
Virginia Beach – Industrial	$21.2	13.1%	-0.01%
Virginia Beach – Multifamily	$0.0	0.0%	0.00%
Virginia Beach – Office	$12.6	3.1%	-0.02%
Virginia Beach – Other	$0.0	0.0%	0.00%
Virginia Beach – Retail	$187.1	20.6%	1.08%
Virginia Beach – Self Storage	$8.8	9.9%	0.31%
Washington – Washington-Arlington-Alexandria, DC-VA-MD-WV MSA	$986.8	3.5%	0.14%
Washington – Hotel	$59.2	5.3%	-0.65%
Washington – Industrial	$0.0	0.0%	0.00%
Washington – Multifamily	$1.3	0.0%	-0.02%
Washington – Office	$508.6	8.0%	0.79%
Washington – Other	$249.7	12.4%	0.45%
Washington – Retail	$168.1	5.4%	-0.01%
Washington – Self Storage	$0.0	0.0%	0.00%
Grand Total – Top 50 MSAs	$31,254.9	4.7%	-0.59%

Source: CRED iQ

REO Regional Malls

CRED iQ

August 31, 2021

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.

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Top Markets for Distressed Hotel Opportunities

CRED iQ

August 26, 2021

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 Name	Address	Outstanding Balance (millions)	DQ Status	CRED iQ Base-Case Value (millions)	Most Recent Appraisal (millions)	Most Recent Appraisal Date
The Standard Highline NYC	_{848 Washington St New York, NY 10014}	$170.0	90+ Days	$151.0	$241.0	9/30/2020
Hilton Garden Inn W 54th Street	^{237 W 54th St New York, NY 10019}	$155.0	Current	$177.0	$251.0	11/24/2014
Holiday Inn FiDi	^{99 Washington St New York, NY 10006}	$87.0	121+ Days	$91.3	$233.0	7/26/2018
Hilton Times Square*	^{234 W 42nd St New York, NY 10036}	$75.6	REO	$50.9	$246.0	10/13/2010
Hilton Long Island Huntington	_{598 Broad Hollow Rd Melville, NY 11747}	$33.3	30+ Days	$40.1	$52.3	5/11/2016

* 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 Name	Address	Outstanding Balance (millions)	DQ Status	CRED iQ Base-Case Value (millions)	Most Recent Appraisal (millions)	Most Recent Appraisal Date
Residence Inn Schaumburg	^{1610 McConnor Pkwy Schaumburg, IL 60173}	$14.5	Current	$14.8	$18.0	10/1/2017
Courtyard Schaumburg	^{1311 American Ln Schaumburg, IL 60173}	$13.8	Current	$14.4	$17.2	10/1/2017
Springhill Suites Schaumburg	^{1550 McConnor Pkwy Schaumburg, IL 60172}	$9.6	Current	$9.2	$11.9	10/1/2017
Best Western O’Hare	_{10300 W Higgins Rd Rosemont, IL 60018}	$8.9	121+ Days	$8.2	$8.7	9/11/2020
Holiday Inn – Chicago	_{2424 W Sullivan Rd Aurora, IL 60506}	$5.3	121+ Days	$4.0	$3.3	8/27/2020

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 Name	Address	Outstanding Balance (millions)	DQ Status	CRED iQ Base-Case Value (millions)	Most Recent Appraisal (millions)	Most Recent Appraisal Date
Courtyard Los Angeles Sherman Oaks	^{15433 Ventura Blvd Sherman Oaks, CA 91403}	$54.5	121+ Days	$51.1	$48.7	8/8/2020
DoubleTree Anaheim – Orange County	_{100 The City Drive S Orange, CA 92868}	$45.1	121+ Days	$68.6	$64.1	8/20/2020
Embassy Suites – Brea	_{900 E Birch St Brea, CA 92821}	$37.4	121+ Days	$53.2	$53.0	11/17/2020
Portofino Inn & Suites – Anaheim CA	_{1831 S Harbor Blvd Anaheim, CA 92802}	$36.8	REO	$30.1	$34.5	4/25/2018
Embassy Suites Anaheim Orange	_{400 N State College Blvd Orange, CA 92868}	$33.0	Current	$48.5	$58.7	4/1/2018

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 Name	Address	Outstanding Balance (millions)	DQ Status	CRED iQ Base-Case Value (millions)	Most Recent Appraisal (millions)	Most Recent Appraisal Date
Hilton Houston Westchase	^{9999 Westheimer Road Houston, TX 77042}	$42.1	Maturity Default	$17.8	$22.2	5/20/2020
Marriott Galleria	^{1750 W Loop S Houston, TX 77027}	$29.8	REO	$21.1	$21.0	9/17/2020
Hilton Garden Inn Houston	^{7979 Willow Chase Blvd Houston, TX 77070}	$18.4	REO	$8.9	$12.5	9/10/2020
Courtyard Galveston	^{9550 Seawall Blvd Galveston, TX 77554}	$7.3	REO	$9.2	$7.9	9/18/2020
Holiday Inn Houston SW Sugar Land	^{11160 Southwest Fwy Houston, TX 77031}	$7.3	121+ Days	$5.0	$9.5	7/23/2020

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	Address	Outstanding Balance (millions)	DQ Status	CRED iQ Base-Case Value (millions)	Most Recent Appraisal (millions)	Most Recent Appraisal Date
Embassy Suites – Hillsboro	_{20001 NW Tanasbourne Dr Hillsboro, OR 97124}	$30.1	Current	$21.2	$33.0	9/18/2020
Hotel deLuxe	_{729 SW 15th Avenue Portland, OR 97205}	$29.2	121+ Days	$28.3	$33.0	9/1/2020
Comfort Inn and Suites – McMinnville	_{2520 SE Stratus Ave McMinnville, OR 97128}	$4.1	Current	$6.7	$7.7	7/28/2020

Source: CRED iQ

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CRED iQ in the News – Regional Mall Distress

CRED iQ

August 18, 2021

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 Name	Location	Outstanding Debt
Town Center at Cobb	Kennesaw, GA	$173,449,158
Florence Mall	Florence, KY	$89,404,415
Southland Mall	Cutler Bay, FL	$65,159,858
Newgate Mall	Ogden, UT	$58,000,000
Oakdale Mall	Johnson 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 Name	Location	Outstanding Debt
Mall St. Matthews	Louisville, KY	$164,710,290
Park Place Mall	Tucson, AZ	$164,332,652
Westfield Citrus Park	Tampa, FL	$123,939,920
Ingram Park Mall	San Antonio, TX	$120,157,888
Mall at Tuttle Crossing	Dublin, OH	$111,961,149

To explore the data more in depth, click here.

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