{"id":2082,"date":"2022-04-04T21:48:17","date_gmt":"2022-04-04T21:48:17","guid":{"rendered":"https:\/\/cred-iq.com\/blog\/?p=2082"},"modified":"2022-04-04T21:48:17","modified_gmt":"2022-04-04T21:48:17","slug":"market-delinquency-tracker-april-2022","status":"publish","type":"post","link":"https:\/\/cred-iq.com\/blog\/2022\/04\/04\/market-delinquency-tracker-april-2022\/","title":{"rendered":"Market Delinquency Tracker – April 2022"},"content":{"rendered":"\n
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CRED iQ monitors distressed rates (DQ + SS%) and market performance for nearly 400 MSAs across the United States, covering over $900 billion in outstanding CRE debt. Distressed rates include loans that are specially serviced, delinquent, or a combination of both. Distressed rates and month-over-month changes are presented below, by property type, for the 50 largest markets.<\/p>\n\n\n\n

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Distressed figures include all properties listed 30 days delinquent or worse, as well as specially serviced loans within the securitized universe including Conduit, Agency, SBLL, and CRE CLO.<\/em> <\/figcaption><\/figure><\/div>\n\n\n\n

The lodging sector exhibited an overall decline in the rate of distressed mortgages in March 2022 to 13.1%, compared to 13.3% in February. However, a more granular view stratified across all lodging markets reveals that nearly half of the Top 50 MSAs exhibited increases in distress on a stand-alone basis. There were 23 total markets out of the Top 50, equal to 46%, with month-over-month increases in the percentage of distressed loans. Hotels accounted for five of the Top 10 increases in distress by market-sector and included Sacramento<\/strong>, Tucson<\/strong>, Austin, Los Angeles<\/strong>, and San Jose<\/strong>. The Sacramento lodging market had the largest increase in distress this month, which was primarily caused by a 30-day delinquency of a $34 million loan secured by The Citizen Hotel Sacramento<\/a>. The loan previously entered into a forbearance agreement in October 2020.<\/p>\n\n\n\n

The Baltimore<\/strong> office market appeared on the list of Top 10 increases in distress by market-sector for the second month in a row. This month, a $24.8 million loan secured by 300 East Lombard<\/a>, a 19-story office tower located in the Inner Harbor, transferred to special servicing due to the impending departure of the property\u2019s largest tenant, Ballard Spahr. Ballard Spahr\u2019s lease expires at the end of April 2022 and accounts for 15% of the property\u2019s NRA. The Milwaukee<\/strong> office market was also notable for an increase in distress, which was primarily driven by the special servicing transfer of The Pinnacle at Bishop\u2019s Woods<\/a>, a three-building suburban office property that secures a $29.1 million loan.<\/p>\n\n\n\n

As noted above, improvements in distressed rates this month were most common for lodging markets. Half of the Top 50 MSAs exhibited lower distressed rates for loans secured by lodging collateral compared to the prior month. Five of the largest decreases by market-sector in March were lodging markets, including Pittsburgh<\/strong> and Cleveland<\/strong>. The Cleveland lodging market remains one of the most severely distressed market-sectors with 39.6% of loans that are distressed.<\/p>\n\n\n\n

Distressed rates for the self-storage sector had noteworthy improvements this month after the $110 million Great Value Storage Portfolio<\/a> loan paid off in full, ahead of its scheduled maturity date in December 2023. The loan had previously transferred to special servicing in June 2021 due to the bankruptcy of the borrower, Natin Paul. The majority of the 64 properties in the collateral portfolio were located in the Houston<\/strong> and Columbus, OH<\/strong> MSAs. Both market-sectors were among the list of Top 10 improvements in distress this month.<\/p>\n\n\n\n

The Minneapolis<\/strong> MSA has the highest overall distressed rate at 23.0%, which was slightly higher than the prior month. Louisville<\/strong> (17.7%), New Orleans<\/strong> (13.4%), Milwaukee<\/strong> (11.3%), and St. Louis <\/strong>(9.73%) comprise the remaining markets with the highest rates of distress. The Cleveland<\/strong> MSA had the fourth-highest distressed rate as of February 2022 but dropped out of the Top 5 distressed markets this month after delinquency and special servicing cures for multiple retail loans. The Raleigh<\/strong> market (0.34%) had the lowest percentage of distress among the Top 50 MSAs for the third consecutive month. The Sacramento<\/strong> MSA also remained one of the Top 5 markets with the lowest percentage of distressed loans this month, despite the relatively large delinquency of The Citizen Hotel Sacramento loan.<\/p>\n\n\n\n

For the full CRED DQ Report, download here:<\/p>\n\n\n\n