Cities with the most delinquent CMBS loans
The coronavirus pandemic has thrown tens of billions dollars in commercial mortgage-backed debt securities on special duty, and even more loans have fallen behind on their monthly payments.
The economic impact of closures and social distancing has affected some sectors much more than others, and the geographic distribution of distress has also been uneven, as a new report Trepp shows.
The New York metropolitan area, one of the early epicenters of the epidemic in the United States and home to much of the country’s most expensive real estate, unsurprisingly experienced the greatest impact in terms of dollar value, with 6. $ 8 billion in delinquent CMBS loans. Besides countless hotels and commercial properties, CMBS loans on other types of assets, such as ground floor under an office building and one corporate rental property, have also experienced difficult times.
The second most affected market is the Chicago metro area, with $ 2.2 billion in delinquent loans. Although this is less than half of New York’s total balance, the delinquency rate in Chicago is twice as high, with nearly 14% of the area’s total CMBS debt currently in arrears.
Minnesota’s Twin Cities area comes in third with $ 1.8 billion in CMBS debt in arrears, most of it from a single loan: the $ 1.4 billion loan to Triple Five Group America Mall, who has been overdue for over 60 days and has been transferred to the special service.
Among major markets, Houston’s hotel sector – facing the double whammy of coronavirus and falling oil prices – has been among the hardest hit, with more than 60% of its CMBS hotel debt now in arrears, against about 40% in New York and less than 24% in Los Angeles. The city’s office sector is also struggling, with nearly 14% of CMBS office debt in arrears, far more than any other metropolitan area.