Since 2009, 5% of resolved commercial mortgage-backed securities (CMBS) loans required at least one trip back to special servicing to be corrected or liquidated, according to new data from Fitch Ratings. This is out of 9,723 loans resolved since 2009.
Of the 519 loans that have made a second trip to special servicing, Fitch Ratings reports that 254 are still with the special servicer, while 265 have either been returned to master servicing or liquidated. The vintages with the highest occurrence of loans returning to special servicing are 2006 and 2007, at 25% and 24%, respectively.
The property type most frequently returning to special servicing is multifamily (29%), followed by retail and office, both at 23%. Of the top four commercial property types, hotel comes in a distant fourth at 11%.
‘Initial analysis of data finds that the majority of loans that return to special servicing were loans that had one-year maturity extensions in 2009 or 2010,’ says Fitch Ratings. ‘These borrowers needed additional time to obtain refinancing and, as liquidity returned to the market in 2011 and 2012, the financing became available.’
Fitch Ratings adds that it is working on a more comprehensive report on the cause and result of CMBS loans that defaulted more than once.
