Manhattan loan delinquencies rise to $3.5B

A $1 billion increase in Manhattan loan delinquencies caused a surge in U.S. CMBS delinquencies, bringing the total to 7.97 percent in May, according to the latest index from Fitch Ratings. Fitch reports that there are currently a dozen loans totaling $3.5 billion that are delinquent in Manhattan. Four loans secured by New York City properties, totaling $30 million, were delinquent, representing 0.3 percent of delinquencies nationwide. Of that total, Stuyvesant Town and Peter Cooper Village accounts for $2.8 billion. The total city delinquencies represent 9.8 percent of all U.S. CMBS delinquencies, a sharp escalation from a year earlier. “As expected, office loan delinquencies have begun to increase and will continue to rise well into next year,” said Mary MacNeill, managing director at Fitch. “Landlords are facing tenant downsizing and in many cases must offer significant concessions and reduced rent to maintain their existing tenant bases.” The largest newly delinquent contributor to the index in May was the $380 million Columbia Center loan, the collateral for which is located in Seattle, Wa. “Continued underperformance among large office properties may prefigure a sizable spike in delinquencies.” MacNeill added. TRD