The pace of commercial mortgage-backed security (CMBS) loans transferring into special servicing is beginning to slow, according to research from Fitch Ratings. Approximately 200 loans have transferred so far this year, compared with 631 loans for the first quarter of 2010.
‘Following a monthly high of 255 loan transfers in January 2010, new specially serviced transfers steadily decreased each month, reaching a low of 74 in November,’ says Fitch Managing Director Mary MacNeill. Since then, the number of monthly loan transfers has not exceeded 78.
Last year, there were 1,646 loans, totaling $28.4 billion, that transferred into special servicing in Fitch's rated portfolio. That total is lower than the 2,162 loans, totaling $37.5 billion, that moved into special servicing in 2009.
The rate of transfers for hotel loans has dropped off sharply (down to 8%), Fitch says. Many underperforming hotels had already transferred to special servicing before the hotel sector entered its current recovery mode. In contrast, office properties continue to lead new transfers, at 41%.
‘High unemployment and lack of job growth will continue to force office-loan borrowers to seek relief as leases roll or are renegotiated,’ MacNeill says.
Fitch published its research in its latest CMBS weekly newsletter.
SOURCE: Fitch Ratings
