CMBS delinquencies hold steady in March

Delinquency rates among commercial mortgage-backed securities (CMBS) deals were 3.3% in March, unchanged from February, but retail and mixed-use properties recorded the highest delinquency increases, according to the latest update from Kroll Bond Rating Agency.

Some 1.6% of the $320 billion U.S. private-label CMBS transactions that KBRA rates, were current and specially serviced, the rating agency noted.

By property type, lodging assets led the way for total delinquencies, with 6.3%, while some 3.5% of the lodging pools were current and specially serviced. Retail followed, with 5.9% of total delinquencies, and 1.6% being current and specially serviced, KBRA found.

The Great Value Storage Portfolio was the largest loan to be resolved in March. The $100 million loan, secured by 64 self-storage properties in 10 states, was in three transactions, the WFCM 2019-Ct50, UBSCM 2019-C16, and UBSCM 2018-C15. It had been transferred to special servicing because Natin Paul, and his company World Class Capital Group, filed for Chapter 11 bankruptcy protection. The loan paid off in full with no loss, KBRA noted.

Among single-asset, single-borrower (SASB) deals, KBRA rates 103 deals with a balance of $63.6 billion and noted no changes of loans in delinquency or special servicing, except for the $237.2 million Walden Galleria loan securing JPMCC 2012-WLDN. The loan had a maturity date of May 1, 2022, and was transferred to the special servicer because of imminent maturity default. The borrower is seeking a five-year loan extension. According to the transaction documents, however, the servicer (or special servicer) may permit an extension of the maturity date beyond the date that is five years prior to the Rated Final Distribution Date. That falls on May 2030, KBRA said.

As for conduit transactions, 4.1% of all property types were in delinquency. KBRA did note that the amount of conduit loans in special servicing decreased for the 11th consecutive month, to $14.9 billion, compared with $15.4 billion from February.

The lodging sector led the way again by property type, with 8.9%, and 5.0% of loans in that property type were in current and special servicing.

Notable loans that were transferred back to their respective master servicers during March 2022 include the $120 million NMS Los Angeles Multifamily Portfolio. The loan was transferred to the special servicer in August 2020 for imminent default. The return to the master servicer includes a $80.2 million partial defeasance of the loan. The mortgage participated in three deals, the COMM 2015-CR27, CFCRE 2016-C3 and the CFCRE 2016-C4, according to KBRA.