Few maturity-related CMBS transfers pay off quickly

Fitch Ratings data first seen by Real Estate Capital shows that just 8.5 percent of maturity-related special servicing transfers that occurred through mid-July of 2016 were paid off within 30 days, which should appease concerned borrowers and investors.

Fitch Ratings data first seen by Real Estate Capital shows that just 8.5 percent of maturity-related special servicing transfers that occurred through mid-July of 2016 were paid off within 30 days, which should appease concerned borrowers and investors.

Analysts noted that, along with the large volume of maturing US CMBS loans in 2016 and 2017, borrowers and investors have been voicing concern that maturity-related loans facing imminent payoff are in some cases being transferred to special servicers unnecessarily.

“There are costs to borrowers and the trust associated with the transfers, which can also impact investors,” Fitch senior director Adam Fox explained.

But of the 271 maturity-related CMBS loans (out of 533 total loans ) transferred through mid-July, the data shows that just 23 loans (8.5 percent) were paid off within 30 days, and just 54 loans (about 20 percent) were paid off within 120 days.

“This information is meant to inform investors and I think they will be surprised at the limited number of loans that payoff within the first 30 days” Fox said. “Based on this data, the special servicers and master servicers are getting it right more than 90 percent of the time. This does not show an alarming trend.”

The 533 total loans had an original principal balance (OPB) of $10 billion, while the 271 maturity-related loans had an OPB of $4.7 billion. 

SHARE