‘Imminent Default’
Commercial Observer
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“Imminent default” looms for a nine-figure loan tied to a major mall in Southern California, underscoring that for all of its recent wins brick-and-mortar retail is not out of the woods yet. Meanwhile, the distressed rate for collateralized loan obligations tied to commercial real estate has ticked up dramatically.
— Tom Acitelli, Deputy Editor
$300M CMBS Loan Secured by Santa Monica Place Mall Faces 'Imminent Default'
A loan secured by an iconic outdoor shopping mall in Santa Monica has entered special servicing again, and faces a maturity default for the second time in two years. The $300 million loan secured by Santa Monica Place — an outdoor shopping mall built in 1980 and renovated in 2010 — has been sent to special servicing and is at risk of “imminent default,” according to Trepp. While the single-asset-single-borrower CMBS loan was initially due to mature in 2019, it received a 36 month extension that established a new maturity date of Dec. 2022. Since then there’s been further extensions. After entering special servicing in Aug. 2022, the loan received a maturity extension to Dec. 2023 that included a pair of one-year extensions that pushed the last possible maturity date to the end of 2025.
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CRE CLO Distress Rate Surpasses 10%
CRED iQ’s research team continues to examine the commercial real estate collateralized loan obligation (CLO) ecosystem from multiple perspectives, including CRED iQ’s latest loan information from the March 2024 reporting period. In this report, we explore and break down the distress levels for CRE CLO during the first quarter of this year. We exclude CRE CLO deals from our monthly delinquency reports so we can continue our examination of this important sector on a stand-alone basis. Some of the largest issuers of CRE CLO debt over the past five years include MF1, Arbor, LoanCore, Benefit Street Partners, Bridge Investment Group, FS Rialto and TPG.
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