The addition of 432 commercial real estate loans totaling approximately $5.2 billion resulted in a 7% increase in Fitch Ratings' U.S. commercial mortgage-backed securities (CMBS) loans of concern between June and last month, the agency says in a new report.
To date, Fitch has identified over $80.7 billion in commercial real estate loans – or 17% of its total rated U.S. CMBS portfolio – as having declining performance or defaulted loans.
One notable entry, Fitch says, is the $227.9 million Resorts International Casino Portfolio loan, which was transferred to special servicing in July due to monetary default when the borrower failed to make its July payment. The borrower cited significant declines in cashflow at the properties.
"Properties directly tied to consumer spending, such as hotels, are the first to exhibit signs of performance declines," says Adam Fox, senior director at Fitch Ratings.
Declining property performance and increasing CMBS defaults within remain the chief contributors to the rising amount of loans of concern.
SOURCE: Fitch Ratings