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

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July 6, 2021

This week, CRED iQ calculated real-time valuations for 5 distressed lodging and retail assets that we expect to be sold in July. The CRED iQ valuations factor in a base-case (Most Likely), a downside (significant loss of tenants), and dark scenarios (100% vacant). For full access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and borrower contact information, sign up for a free trial here.

Homewood Suites – Lansdale

170 keys Extended-Stay Hotel, Lansdale, PA 19446

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

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

Springhill Suites – Willow Grove PA

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

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

Courtyard By Marriott – Shawnee

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

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

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

Bel Air Center

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

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

High Ridge Center

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

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

About CRED iQ

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

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

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CRED iQ

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June 30, 2021

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This week, CRED iQ calculated real-time valuations for five distressed loans secured by multifamily properties. The CRED iQ valuations factor in a base-case (Most Likely), a downside (significant loss of tenants), and dark scenarios (100% vacant). For full access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and contact information, sign up for a free trial here.

1209 Dekalb

127-unit Multifamily, Brooklyn, NY 11221

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

1502 Dekalb Avenue

6-unit Multifamily, Brooklyn, NY 11237

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

Glenwood Farms Apartments

294-unit Multifamily, Richmond, VA 23223

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

Autumn Run

320-unit Multifamily, Naperville, IL 60563

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

Dauphin

22-unit Multifamily, Philadelphia, PA 19125

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

About CRED iQ

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

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CRED iQ and Waterstone Defeasance Announce Integration Partnership

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CRED iQ

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June 29, 2021

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

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

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

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

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

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

About CRED iQ

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

Michael Haas

Co-Founder/Managing Partner

mike@cred-iq.com

cred-iq.com

About Waterstone Defeasance

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

George Rodriguez

Managing Partner

George@WaterstoneDefeasance.com

DefeasanceServices.com

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

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

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

CRED iQ Valuation Updates – Specially Serviced Loans

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CRED iQ

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June 24, 2021

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This week, CRED iQ calculated real-time valuations for five specially serviced loans that have recently transferred to special servicing. The CRED iQ valuations factor in a base-case (Most Likely), a downside (loss of tenants), and dark scenarios (100% vacant). For full access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and contact information, sign up for a free trial here.

Jefferson Mall

281,020-sf, Regional Mall, Louisville, KY

The Loan transferred to special servicing on 1/28/21 for imminent non-monetary default related to the bankruptcy proceedings of the Loan sponsor. The Loan is secured by a portion of a regional mall located in Louisville, KY. Notable CRED iQ Comps are Oxmoor Center and Mall St. Matthews, both within 10 miles of Jefferson Mall.

The Loan was modified on 8/11/20 to extend maturity two years to 6/1/26. The Borrower is seeking a subsequent modification and Argentic is completing the necessary due diligence to address the request. An updated appraisal for 2/25/21 was recently reported, implying a cap rate of 15%; although, the CRED iQ Base-Case valuation comes in even lower. For the full valuation report and loan-level details, click he r e.

Newport Centre

1,148,835-sf, Regional Mall, Jersey City, NJ

The Loan transferred to special servicing on 5/3/21 for maturity default. Prior to maturity, a forbearance agreement allowed the Borrower to defer principal payments from May through July 2020. Deferred principal payments were required to be paid back by the 5/1/21 maturity date. The Loan is secured by 972,484 sf of retail space that includes 3 anchor parcels occupied by Macy’s, Sears, and Kohl’s. JCPenney owns and operates a fourth anchor parcel totaling 180,891 sf, located on the south end of the property. The Borrower has requested for a maturity extension. For the full valuation report and loan-level details, click here.

Crowne Plaza Portland Convention Center Hotel

241 keys, Full-Service Hotel, Portland, OR

The Loan transferred to special servicing on 5/7/21 for maturity default. Loan is secured by a full-service hotel that operates as a Crowne Plaza and is heavily dependent on primary demand generators such as the Moda Center and the Oregon Convention Center. NOI for the hotel in 2020 was negative due to demand disruption from COVID-19. Rialto is reaching out to the Borrower to assess the next steps for workout. For the full valuation report and loan-level details, click here.

Champaign Portfolio

200,191-sf, Mixed-Use Office Portfolio, Champaign, IL

The Loan transferred to special servicing on 4/23/21 for imminent monetary default. The Loan is secured by a portfolio of 10 single-story buildings, that primarily function as office use with some light industrial capability. The Borrower has not yet signed a pre-negotiation agreement and loan workout has yet to be determined.

Courtyard By Marriott – Lake Norman

90 keys, Limited-Service Hotel, Huntersville, NC

The Loan transferred to special servicing on 5/4/21 for payment default. The Loan is secured by a limited-service hotel that operates as a Courtyard by Marriott catering to leisure guests with the benefit of lake access within 5 miles. COVID-19 was cited by the Borrower as the primary reason for distress and Rialto has reached out to the Borrower to assess the next steps of workout. For the full valuation report and loan-level details, click here.

About CRED iQ

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

FREE TRIAL

June 2021 Delinquency Report

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CRED iQ

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June 9, 2021

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The overall delinquency rate continued its decline for the eleventh consecutive reporting period following its rapid ascent from April to June 2020. As we have been reporting, despite this steady decline, defaults on CRE mortgages remain somewhat elevated across the country, driven primarily by the retail and lodging sectors. As many areas within the United States are beginning to return to a pre-pandemic level of normalcy, we expect default rates to continue to level off with more immediate and significant improvements in the hotel sector throughout the remainder of the year.

Click below to download the free Delinquency Report

The-CRED-DQ-Report-June-2021 Download

CRED iQ monitors market performance for nearly 400 MSAs across the United States. Below is a summary of the default rates for the 50 largest metros segmented by property type. For these 50 MSAs, the highest delinquency was in Minneapolis, followed by Louisville and New Orleans. The New Orleans hotel market saw the largest month-over-month increase in delinquency. Allentown, Pennsylvania reported the lowest default rate among the 50 MSAs. The most significant month over-month decline in delinquency was in the Nashville hotel market.

Select markets from the June 2021 CRED DQ Report

About CRED iQ

CRED iQ is a commercial real estate data, analytics, and valuation platform designed to unlock investment, financing, and leasing opportunities. CRED iQ provides real-time property, loan, tenant, ownership, and valuation data for over $910 billion of commercial real estate.

CRED iQ tracks loan-level performance for the entire CMBS, CRE CLO, SBLL, and Agency universes.

Start Free Trial

CRED iQ Valuation Updates – Specially Serviced Loans

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CRED iQ

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May 26, 2021

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This week, CRED iQ calculated real-time valuations for five specially serviced loans that have not received an updated appraisal or BOV. The CRED iQ valuations factor in a base-case (Most Likely), a downside (loss of major tenant), and dark scenarios (100% vacant). For full access to the valuation reports as well as full CMBS loan reporting, including detailed financials, updated tenant information, and contact information, sign up for a free trial here.

3 Park Avenue

667,446-sf CBD Office, New York City, NY 10016

The $182.0 million senior loan transferred to the special servicer in March 2021 for delinquency and a low DSCR. 3 Park Avenue, a 667,466 SF office and retail building located on the corner of 34th Street and Park Avenue in New York, NY. Borrower is both the Landlord and the Tenant on the leasehold estate. The property was developed in 1975, compromised of 41 stories with ~640,000 SF of office space and ~26,000 SF of retail space.

As of May 2021, the loan is showing delinquent and has been delinquent at least three times in within the last 12 months. The Borrower presented the Lender with a relief request related to COVID-19 economic impact. ROR Letter was mailed certified to the Borrower. The occupancy as 09/30/2020 also decreased below 80% of UW occupancy to 61.54% from the 85.47% as of 09/30/2019. YTD09 2020 DSCR is 1.23x compared to YE 2019 DSCR of 1.77x. For the full valuation report and loan-level details, click here.

One City Centre

602,122-sf, CBD Office, Houston, TX 77002

The loan transferred to the special servicer in March 2021 for imminent monetary default. CRED iQ ran an updated valuation that valued the office tower at $58.7 million ($98/sf) given its current occupancy of 28.5%.

Tenant Rents and other revenue are in Cash Sweep. PNA was signed by Borrower and discussions took place with SS. March financials and April rent roll were provided. The Major Tenant – Waste Management did not sign a new lease and elected to vacate the building the end of 2020. Borrower is not willing to fund the operating shortfall and debt service monthly. Borrower is asking to utilize funds held in Sweep Account to pay for operating expenses and Waste Management credit owed for overpayment of 2020 operating costs. For the full valuation report and loan-level details, click here.

Arbor Place Mall

546,374-sf, Regional Mall, Douglasville, GA

The Loan transferred to special servicing on 4/22/20 for imminent monetary default. The Borrower stated that they were not going to be able to cover shortfalls at the property. The loan is secured by a regional mall located in Douglasville, GA.

The Lender is working with the Borrower on a loan modification to determine if there are reasonable terms that can be negotiated that are acceptable to the Lender. The Borrower has kept the loan payments current, and the parent company of the Borrower has filed bankruptcy along with the Guarantor for this loan. Midland is monitoring the bankruptcy to determine if there is any action needed by the lender. For the full valuation report and loan-level details, click here.

Mall St. Matthews

668,508-sf Regional Mall, Louisville, KY 40207

The property is a 673,782 sf regional mall in Louisville, KY. Borrower was unable to pay off the loan on the maturity date. The special Servicer is currently in discussion with the borrower on a potential workout and/or deed-in-lieu. For the full valuation report and loan-level details, click here.

Meadows Mall

308,620-sf Regional Mall, Las Vegas, NV 89107

The loan transferred to MLS Special Servicing 10-1-2020 due to Monetary Default. Cash trap has been sprung and all rents are being swept into the lockbox. Borrower has requested forbearance, and that Lockbox funds be released to fund operating expenses. BOV and Appraisal have been received. Discussions to arrive at a sustainable resolution are ongoing. For the full valuation report and loan-level details, click here.

About CRED iQ

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

FREE TRIAL

May 2021 Delinquency Report

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CRED iQ

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May 10, 2021

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The overall delinquency rate continued its decline for the tenth consecutive reporting period following its rapid ascent from April to June 2020. While the commercial real estate sector may have largely avoided a sustained period of distress resulting from the pandemic, defaults on CRE mortgages remain somewhat elevated across the United States, driven primarily by the retail and lodging sectors. With ongoing COVID 19 vaccination efforts, we expect default rates to continue to level off with more immediate and significant improvements in the hotel sector throughout the remainder of the year.

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

CRED iQ monitors market performance for nearly 400 MSAs across the United States. Below is a summary of the default rates for the 50 largest metros segmented by property type. For these 50 MSAs, the highest delinquency was in Minneapolis, followed by Louisville and Cleveland. Louisville saw the largest month-over-month increase in delinquency. Allentown, Pennsylvania reported the lowest default rate among the 50 MSAs. The most significant month-over-month decline in delinquency was in New York City.

The CRED DQ Report – Featured Markets May 2021

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.

About CRED iQ

CRED iQ is a commercial real estate data, analytics, and valuation platform designed to unlock investment, financing, and leasing opportunities. CRED iQ provides real-time property, loan, tenant, ownership, and valuation data for over $910 billion of commercial real estate..

CRED iQ tracks loan-level performance for the entire CMBS, CRE CLO, SBLL, and Agency universes.

Start Your Free Trial

CRED iQ Launches Non-CMBS Valuation Tool

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CRED iQ

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May 5, 2021

0

Our team just launched a great new product where our customers can value any commercial building within the US (CMBS & Non-CMBS) leveraging our massive database of property, loan, and financial data using our proprietary valuation software and comparable property technologies.

Subscribers can easily tweak assumptions on the fly and analyze the impact to the final value. Users can run scenarios and save different versions for base-case, downside (distressed), and dark scenarios.

April 2021 Delinquency Report

By

CRED iQ

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April 4, 2021

0

The overall delinquency rate continued its decline for the ninth consecutive reporting period following its rapid ascent from April to June 2020. Although there has been a favorable trend, defaults on CRE mortgages remain elevated across the United States, driven primarily by the retail and lodging sectors. With ongoing COVID 19 vaccination efforts, we expect default rates to continue to level off with more immediate and significant improvements in the hotel sector throughout the remainder of the year.

CRED iQ monitors market performance for nearly 400 MSAs across the United States. Below is a summary of the default rates for the 50 largest metros segmented by property type. For these 50 MSAs, the highest delinquency was in Minneapolis, followed by Cleveland and New Orleans. New York City saw the largest month-over-month increase in delinquency. Allentown, Pennsylvania reported the lowest default rate among the 50 MSAs. The most significant month-over-month decline in delinquency was in Louisville.

For the full report, download here:

The-CRED-DQ-Report-April-2021 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.

March 2021 Delinquency Report

By

CRED iQ

-

March 5, 2021

0

Overall delinquency continued its decline for the eighth consecutive reporting period following its rapid ascent from April to June 2020. Although there has been a favorable trend, defaults on CRE mortgages remain at an elevated level across the United States, driven primarily by the retail and lodging sectors. We expect delinquency to remain elevated for 2021, however as COVID 19 vaccination efforts continue to ramp up, we anticipate more immediate and significant improvements to the hotel default rate throughout the year.

For the full delinquency report, download here:

The-CRED-DQ-Report-March-2021 Download

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. Consistent with the months following the start of the pandemic, 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.

For full access to CRED iQ’s loan, property and valuation data, sign up here: