TRD Insights: These metro areas are seeing the most CMBS loan distress

New York, Chicago and LA crack top four by delinquent loan balance

New York /
Jun.June 26, 2020 07:30 AM
From top: Los Angeles, Minneapolis, Chicago and New York 

From top: Los Angeles, Minneapolis, Chicago and New York

The coronavirus pandemic has thrown tens of billions of dollars in commercial-mortgage backed securities debt into special servicing, and even more loans have fallen behind on their monthly payments.

The economic impact of shutdowns and social distancing has hit some sectors far more than others, and the geographic distribution of distress has also been uneven, as a new report from Trepp shows.

The New York City metropolitan area, an early epicenter of the U.S. outbreak and home to much of the country’s priciest real estate, has unsurprisingly seen the biggest impact in terms of monetary value, with $6.8 billion in delinquent CMBS loans. Apart from countless hotels and retail properties, CMBS loans on other types of assets, like the ground under an office building and a corporate rental apartment building, have also run into hard times.

The next most impacted market is the Chicago metro area, with $2.2 billion in delinquent loans. While that’s less than half of New York’s total balance, the delinquency rate in Chicago is twice as high, with nearly 14 percent of the area’s total CMBS debt currently delinquent.

Minnesota’s Twin Cities area comes in at number three with $1.8 billion in delinquent CMBS debt, the bulk of which comes from just one loan: the $1.4 billion loan on Triple Five Group’s Mall of America, which is more than 60 days delinquent and has been transferred to special servicing.

Among top markets, Houston’s hotel sector — facing the double whammy of coronavirus and falling oil prices — has been among the hardest hit, with more than 60 percent of its hotel CMBS debt now delinquent, compared to about 40 percent in New York and less than 24 percent in Los Angeles. The city’s office sector is also struggling, with almost 14 percent of office CMBS debt in delinquency, far more than any other metropolitan area.


Related Articles

arrow_forward_ios
Barbara Russo, Danielle Englebardt, and Oren and Tal Alexander (Getty, iStock BFA)
Ranking the top residential brokers on the Upper East Side
Ranking the top residential brokers on the Upper East Side
From left: Michael Dell, Alex Rodriguez and Donald Trump along with the Trump Hotel in Washington, D.C. (Getty Images, The Trump Organization, iStock)
Firm that manages Michael Dell’s wealth finances deal for Trump Hotel
Firm that manages Michael Dell’s wealth finances deal for Trump Hotel
Capstone Equities' Joshua Zamir and Renwick Hotel at 118 East 40th Street (TripAdvisor)
New owner Capstone revives Midtown’s Renwick Hotel
New owner Capstone revives Midtown’s Renwick Hotel
DoorDash's Tony Xu with 51 Eads Street and 6133 Jericho Turnpike
Startup plans LI convenience stores that shoppers can’t enter
Startup plans LI convenience stores that shoppers can’t enter
Jonathan Goldstein, CEO, Cain International and 356 West 58th Street (Cain International, Google Maps)
Midtown’s Hudson Hotel slated for mixed-use redevelopment
Midtown’s Hudson Hotel slated for mixed-use redevelopment
Joseph Chetrit and 98 Montague Street in Downtown Brooklyn (Credit: Getty Images and Google Maps)
Brooklyn’s iconic Bossert Hotel facing foreclosure
Brooklyn’s iconic Bossert Hotel facing foreclosure
Strong month for US economy, but hospitality hiring slows
Jobs report shows more workers returning to office
Jobs report shows more workers returning to office
Related's Stephen Ross, the Gregory Hotel at 42 West 35th Street and Meadow Partners’ Jeffrey Kaplan (Getty, Google Maps, Meadow Partners)
Related sues Meadow after foreclosure on Garment District hotel
Related sues Meadow after foreclosure on Garment District hotel
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...