Morningstar: Bankruptcy of hhgregg makes retail CMBS loans riskier

Miami /
Mar.March 11, 2017 12:30 PM

Investment research firm Morningstar Credit Ratings identified 10 commercial real estate loans with a heightened default risk since retailer hhgregg Inc. filed for bankruptcy, including a loan of almost $7 million on an hhgregg store in Boca Raton.

The Indianapolis-based retailer of appliances and electronics filed for Chapter 11 bankruptcy March 6, just days after announcing plans to close 88 stores including 11 in South Florida, plus a distribution center in Miami and two other locations.

The bankruptcy filing raised the default risk on $156.8 million of loans in the form of commercial mortgage-backed securities (CMBS) on 10 properties where hhgregg has been operating, according to Morningstar.

Morningstar also reported that hhgregg is the sole occupant of its location in Boca Raton, the collateral for a CMBS loan with an outstanding balance of $6.96 million. The retailer’s address in Boca Raton is 20841 State Road 7, according to its website.

All of the other nine CMBS loans that Morningstar red-flagged are backed by retail properties where the loss of hhgregg as a tenant wiould lower the occupancy rate below 80 percent, “our threshold for at-risk occupancy,” the Chicago-based investment research firm reported.


Related Articles

arrow_forward_ios
(left to right) Nuveen's Mike Nuveen with 800 Waterford Way and Pebb Enterprises' Ian Weiner with 5355 Town Center Road (CoStar, Nuveen, TVS Design, Pebb)
Lease roundup: Nuveen nabs fintech tenant in Miami, Brookfield scores 20 leases at Boca’s Mizner Park
Lease roundup: Nuveen nabs fintech tenant in Miami, Brookfield scores 20 leases at Boca’s Mizner Park
The 851 Building at 851 Northwest Broken Sound Parkway at the Park at Broken Sound in Boca Raton (Marcus & Millichap, LinkedIn)
NJ pediatrician pays $14M for Park at Broken Sound offices in Boca Raton
NJ pediatrician pays $14M for Park at Broken Sound offices in Boca Raton
Shaul Rikman, Roni Soffer, Mati Rikman, and Moshe Wechsler with 21077 Powerline Road (Isram Realty Group, Emerald Empire, Google Maps)
Emerald Empire pays $25M for shopping center near Boca Raton
Emerald Empire pays $25M for shopping center near Boca Raton
From left: Buyers Neil Merin, Dung Lam and Jordan Paul along with 1001 Yamato Road (top) and 999 Yamato Road (bottom) (NAI/Merin Hunter Codman, Moris Moreno)
Yamato Office Center in Boca Raton trades for $46M
Yamato Office Center in Boca Raton trades for $46M
Pebb Enterprises' Ian Weiner (right) and Banyan Development's  Jason Sher with Research Park at Florida Atlantic University (Pebb, Avison Young, LinkedIn, iStock)
Pebb, Banyan pay $37.5M for Research Park at FAU in Boca Raton
Pebb, Banyan pay $37.5M for Research Park at FAU in Boca Raton
Real Estate Investment Services’ Kyle Matthews with  201 East Las Olas Boulevard (Real Estate Investment Services, Loopnet)
Lease roundup: Matthews Real Estate opens first Florida office in Fort Lauderdale
Lease roundup: Matthews Real Estate opens first Florida office in Fort Lauderdale
2950 Northwest Fifth Avenue in Boca Raton (BanyanPlace.org)
Montreal investor pays $20.5M for Palm Beach County assisted living facilities
Montreal investor pays $20.5M for Palm Beach County assisted living facilities
Butters Group's Malcolm Butters with 1751 North Military Trail (Floridatrend, Butters Group, iStock)
Butters and Konsker propose $75M Boca Raton office project
Butters and Konsker propose $75M Boca Raton office project
arrow_forward_ios

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

Loading...