High interest rates continue to dog owners of commercial real estate, offices in particular, and some are running out of time to pay debts.
Last month, according to Trepp, nine CMBS loans with balances of at least $100 million were sent to special servicing, a precursor to default. Here are details on each of them, ranked by outstanding balance.
Aon Center | $443M | Chicago
The massive loan on 601W Companies’ Aon Center at 200 East Randolph Street in Chicago went to special servicing eight years after the firm purchased the 2.8 million-square-foot Class A office tower for $712 million. Barry Sternlicht’s special servicer LNR Partners is handling a $43 million tranche of the $678 million debt package secured by the 83-story tower. The total debt comes due July 1.
Gas Company Tower and World Trade Center Parking Garage | $350M | Los Angeles
Brookfield Properties defaulted on this loan on its Downtown Los Angeles trophy office tower at 555 West 5th Street in February. The financing package connected to the property was $465 million, according to an SEC filing. Concurrently, Brookfield also defaulted on $319 million in loans connected to nearby 777 South Figueroa Street.
Hughes Center | $325M | Las Vegas
This loan on Blackstone’s 1.5-million-square-foot, 19-building office campus in Sin City went into special servicing after the company stopped making debt payments. The complex has 10 office buildings and 110,000 square feet of retail space across 68 acres. The loan was transferred to KeyBank after Blackstone said it would not be able to make future monthly payments, according to the Commercial Observer.
Bergen Town Center | $300M | Paramus, NJ
The Bergen County mall’s loan went into special servicing last month, even as Urban Edge Properties plans to transform the property. The landlord is proposing to redevelop part of the mall into 456 apartments across two multifamily buildings at 1 Bergen Town Center.
Parkhill City | $225M | Queens
The Chetrit Group has fallen behind multiple times in recent months on the loan covering 640 multifamily units in the Jamaica neighborhood. The debt, backed by 150-11 89th Avenue and 152-09 88th Avenue, was marked 30 days delinquent in November. The $225 million mortgage comes due in July.
Deptford Mall | $160M | Deptford, NJ
The South Jersey mall, within driving distance of Philadelphia and Atlantic City, had its loan sent to special servicing last month. Macerich owns and manages the mall, the only indoor regional shopping center in Gloucester County. The 1-million-square-foot facility is anchored by Macy’s and Dick’s Sporting Goods.
IDS Center | $155M | Minneapolis
Accesso’s debt on the IDS Center went to special servicing because the owner is expected to default next month, according to the Commercial Observer. The 57-story, 1.4-million-square-foot complex consists mostly of office space, but also has a significant retail portion. For the past three years, occupancy has averaged 75 percent, according to the Observer.
Fair Oaks Mall | $154M | Fairfax
The Fair Oaks Mall near Washington, D.C., matures next month, according to the Commercial Observer. The regional shopping center, owned by Taubman Centers, has a $242.2 million mortgage secured by a 780,000-square-foot portion of the property. Anchors include Macy’s and JCPenney.
Westfield MainPlace | $140M | Santa Ana
This loan is in special servicing for the second time in less than a year. The Southern California mall is “facing imminent maturity default,” according to Trepp. UBS and Bank of America provided the CMBS loan in 2012; the property is owned by Centennial Real Estate and USAA Real Estate, two of the three partners who purchased it in 2018.
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As CMBS loans backed by struggling properties become delinquent, new issuance of commercial mortgage-backed securities is dwindling.
The market just endured its slowest period in more than a decade. Domestic, private CMBS issuance totaled $5.98 billion in the first quarter, down 12 percent from the previous quarter and 79 percent year-over-year, according to Trepp.