Brokers marketing USD 150m in distressed CRE loans, REOs; mostly retail, hotel - Debtwire

Brokers marketing USD 150m in distressed CRE loans, REOs; mostly retail, hotel

19 October 2017 - 12:00 am

Brokers Mission Capital Advisors and DebtX are separately marketing USD 149.5m of non- and sub-performing CRE loans and REO assets, according to multiple sources familiar with the transactions. The sales include USD 109.5m in retail and hotel loans, according to the sources.


Mission is marketing the roughly USD 47m 300-318 Fordham Road loan from CSMC 2007-C2, according to a Debtwire ABS review of offering materials. DebtX’s offerings include three loans totaling USD 62.5m backed by retail and hotels.


Retail loans are trading in a wide range, with weaker offerings going for pennies on the dollar and stronger loans fetching prices above par, the first source said. In August, the USD 25.5m Parkway Plaza loan, pulled from CD 2007-CD5, was bid at auction at USD 19.8m, or 78 cents on the dollar, falling short of a July 2016 appraised value of USD 22m, as reported (see story, 9 August).


Retail loan prices are closely tied to the financial health of retail tenants, the source said. “We see more demand for strip centers anchored by Dollar General or Dollar Tree,” the source said. “Ones with K-Mart and Sears, they struggle.”


CRE loans are trading at yields in the mid-4%-low 5% range, according to Stifel analyst Erik Rand writing on 2 October. In general, non-performing CRE loans are trading at 65%-70% of broker price opinion in judicial foreclosure states, and slightly over 70% of BPO in non-judicial states. Sub-performing and scratch-and-dent CRE loans are trading at yields ranging from the low 5% to 6% range, Rand wrote. He described the prices as steady at post-bubble highs.


The Bronx, New York, retail center that backs the Fordham credit is fully occupied by nine tenants, including T-Mobile and various clothing stores. Indicative bids are due 25 October and final bids are due 28 November.


The CMBS loan has been locked up in litigation between the borrower and special servicer Torchlight Loan Services, servicing notes state. The note was previously modified in 2012 and split into A and B notes. They carry a current balance of USD 30m and USD 17.7m, respectively, Trepp data show.


Loans now being marketed by DebtX include:


  • NPLs with a USD 59.77m balance consisting of five notes secured by 13 pieces of collateral located in West Virginia, Georgia and Alabama. The loans carry a 5% weighted average coupon and a 13 February 2022 weighted average maturity. The borrower paid as agreed through January 2017. Collateral consists of about 620,000 sq ft of retail shopping centers, two nationally flagged hotels totaling 194 rooms and 94 acres of land held for development. The loans are cross-collateralized and cross defaulted. Indicative and final bids are due 8 and 29 November, respectively.
  • A USD 1.9m NPL secured by a first lien on a 57,000 sq ft Wisconsin shopping center. The property was appraised in May 2017 for USD 1.67m and is currently 52% occupied by seven tenants. Final bids are due 14 November.
  • A USD 815,000 sub-performing loan that matured in June, collateralized by a 30,000 sq ft multi-tenant retail center in St. Marys, Georgia. The borrower has continued making monthly payments based upon a fixed interest rate of 7%. The property was appraised in July at USD 1m. Final bids are due 25 October.
  • Two HUD multifamily loans totaling USD 20.5m are being offered by DebtX on behalf of J.S. Watkins Realty Partners. The sale includes a USD 16.98m non-performing multifamily loan backed by a Missouri property and a USD 3.57m NPL backed by a Texas property. Bids will be taken 8 November. In May one multifamily note with a USD 9.2m UPB fetched USD 4m, or about 43% of UPB, as reported (see story, 26 May). The loan was backed by 560 on Main in Willamantic, Connecticut, an 84-unit rental complex, as reported.
  • A USD 14.5m loan and REO portfolio, consisting of 22 loans of mixed performance and 13 REO assets. The underlying properties are located in 17 states. Collateral types include office, restaurant, gas station/retail, land, residential and mixed-use commercial properties. The portfolio is generating about USD 600,000 in trailing 12-month cash flow. Final bids are due 14 November.
  • A USD 3.4m NPL collateralized by nine office condominiums comprising 50,000 sq ft in a 28-story mixed-used building in Baltimore County, Maryland. The borrower is making interest payments in accordance with its bankruptcy decree which also orders the sale of the properties. The condos were recently appraised at USD 2.1m. Final bids are due 30 October.
  • A USD 1.6m NPL secured by a US airport, including an entire airport operation and excess land, mostly in Maryland. The facility, located on more than 350 acres, has operated since the 1940s and continues to act as a reliever airport for larger airports in the area. Final bids are due 10 November.

In addition to the loans, DebtX is also helping a prospective borrower seeking a USD 1.6m acquisition loan to finance a USD 3.36m purchase of an unanchored 52,000 sq ft Illinois strip center.


by Maura Webber Sadovi and Sarika Gangar