Fitch: Average loan size in special servicing increases

Fitch: Average loan size in special servicing increases


12 February 2010 8:29 AM
HNN Newswire



Fitch Ratings' U.S. CMBS Market Trends highlights and trends

Average Loan Size in Special Servicing Increasing

Fitch Ratings reports the average loan size for loans moving into special servicing has increased 2.4 times from a year ago to $17.2 million. Five of the loans newly transferred in January had balances in excess of $100 million. The larger loan balances have been a factor in the rise in Fitch Ratings' loan delinquency index (LDI).

Within the agency's rated universe of $452.9 billion, there are 621 loans greater than $100 million ($136 billion). Of these loans, 558 or 93% by dollar balance were securitized in 2005 or later vintages when underwriting practices began to deteriorate. Currently, 88 of the 558 are at the special servicer and 87 are considered Fitch loans of concern . Should these loans of concern default, an additional $18 billion would move to special servicing.

Fitch Ratings tracks the loans that move into special servicing on a daily basis for the 473 transactions in its portfolio. In January, 248 loans totaling $4.27 billion moved into special servicing. This brings a total of 2,880 loans, representing 10.4% of Fitch's rated universe by dollar balance in special servicing. Of the loans transferred in January, 55% were due to imminent default and 35% were due to monetary default.

The property type with the largest influx in January was retail at $1.4B or 33% of the January transfers. The largest of the new transfers was the $550 million Palisades Center retail loan in the COMM 2005-FL10 transaction. The loan, which is collateralized by a two million square foot super regional center in West Nyack, NY, transferred for imminent default as it approaches its final maturity without available extensions or a refinancing commitment. Property performance remains stable with the most recent servicer reported occupancy at 100% as of September 2009 and the most recent reported debt service coverage ratio is 2.25 times as of year end 2008. The transfer of the loan highlights the continued limited liquidity available to refinance large loans even when they are performing.

The distribution of property types in special servicing are:

•Hotel: 275 loans totaling $11.0 billion, out of a universe of 2,131 loans, $49.3 billion
•Multifamily: 872 loans totaling $9.8 billion, out of a universe of 9,320 loans, $62.2 billion
•Office: 509 loans totaling $7.5 billion, out of a universe of 6,559 loans, $141.5 billion
•Retail: 842 loans totaling $15.0 billion, out of a universe of 12,837 loans, $127.3 billion

Fitch Ratings continues to maintain a negative outlook for all property types as performance of commercial properties generally lags the economy. Hotel loan defaults, especially luxury brands, which have been particularly hard hit by the recession, will continue to outpace defaults of multifamily, retail, and office properties in the near term. Currently 22% of the hotel loans within The agency's portfolio are in special servicing, followed by 16% of multifamily loans, 12% of retail loans, and only 5% of office loans. Of the hotel loans transferred to special servicing in 2009, 89% were due to imminent default and many later became delinquent.

Contact: Mary MacNeill +1-212 908-0785

View the chart of the largest rated specially serviced loans


New Issuance

GTP Towers Issuer, LLC Global Tower Series 2010-1
Fitch Ratings has issued a presale report on GTP Towers Issuer, LLC Secured Tower Revenue Notes, Global Tower Series 2010-1. The transaction is an issuance of notes backed by mortgages representing no less than 80% of the annualized run rate NCF and is guaranteed by the direct parent of the borrower. Those guarantees are secured by a pledge and first priority perfected security interest in 100% of the equity interest of the borrower, which owns or leases 1,351 wireless communication sites, and of its direct parent, respectively.

Fitch rates CSMC Series 2010-RR1
This transaction is a resecuritization of the ownership interest in three commercial mortgage-backed certificates which total $373,960,000. The transaction consists of three non-pooled re-REMIC bond groups each backed by one underlying super-senior A-4 bond.


Rating Actions

Fitch Ratings affirms RBSCF Trust 2009-RR2 Pass-Through Certificates, Series 2009-RR2

Class A-2FX of ML-CFC 2007-5
Fitch Ratings has assigned a 'AAA/LS2' rating to the $25,000,000 class A-2FX of ML-CFC Commercial Mortgage Trust 2007-5. The creation of the A-2FX class is the result of the bifurcation of the existing $60 million class A-2FL certificate. There has been a partial termination of the swap agreement for class A-2FL with $25 million of the certificate balance being re-allocated to the new fixed-rate class A-2FX certificate. Class A-2FL remains floating rate with a reduced certificate balance of $35 million.


Performance Reports

Wachovia Bank Commercial Mortgage Trust, Series 2005-C19

Recent Special Servicing Transfers

The list below summarizes loans transferred to special servicing during the period of
February 5-10. This list includes loans only within the Fitch Ratings' rated portfolio
and with balances greater than $20 million.

Transaction: Morgan Stanley Capital 2007-XLF
Property: 155 Swanson Road
City/State: Boxborough, MA
Property Type: Office
Balance: $85.5 million
MS: Midland Loan Services
SS: CT Investment Management Co.
Reason for Transfer: Maturity Default

Transaction: UBS 2007-FL1
Property: Rexcorp Princeton Office Portfolio
City/State: Princeton, NJ
Property Type: Office
Balance: $48.0 million
MS: Berkadia
SS: Berkadia
Reason for Transfer: Imminent Default

Transaction: BACM 2007-1
Property: Indian Hills Apartments
City/State: Euclid, OH
Property Type: Multifamily
Balance: $46.0 million
MS: Bank of America
SS: CWCapital Asset Management
Reason for Transfer: Monetary Default

Transaction: COMM 2006-C8
Property: Shoppes at Dadeland
City/State: Miami, FL
Property Type: Retail
Balance: $39.0 million
MS: Midland Loan Services
SS: LNR Partners
Reason for Transfer: Monetary Default

Transaction: Morgan Stanley 2007-IQ16
Property: Crown Plaza-Addison
City/State: Addison, TX
Property Type: Hotel
Balance: $37.0 million
MS: Berkadia
SS: Centerline Capital Group
Reason for Transfer: Imminent Default

Transaction: GCCFC 2007-GG9
Property: Aqua Via Apartments
City/State: Oakland, CA
Property Type: Multfamily
Balance: $34.0 million
MS: Wachovia
SS: LNR Partners
Reason for Transfer: Imminent Default

Transaction: Chase 2000-2
Property: Embassy Suites Atlanta-Buckhead
City/State: Atlanta, GA
Property Type: Hotel
Balance: $32.5 million
MS: Berkadia
SS: Berkadia
Reason for Transfer: Imminent Default

Transaction: Chase 2000-2
Property: Embassy Suites San Francisco
City/State: San Francisco, CA
Property Type: Hotel
Balance: $22.3 million
MS: Berkadia
SS: Berkadia
Reason for Transfer: Imminent Default

Transaction: UBS 2007-FL1
Property: St. Anthony Hotel
City/State: San Antonio, TX
Property Type: Hotel
Balance: $22.3 million
MS: Berkadia
SS: Berkadia
Reason for Transfer: Maturity Default