“NYC’s Second Largest CMBS Office Loan Sent to Special Servicing in May”

"NYC's Second Largest CMBS Office Loan Sent to Special Servicing in May"

In May, Moody’s reported that 16 CMBS office loans worth $738 million were placed in special servicing. One of these loans was for 393-401 Fifth Avenue in New York, valued at $95 million. The loan entered special servicing due to an imminent balloon/maturity default as almost all leases are set to expire within three years.

The rate of CMBS office loans entering special servicing has seen a significant increase and now stands at over 10%. This can be attributed to various factors such as the rise of hybrid work environments and high interest rates which have put considerable pressure on these loans. As more office maturities come up and with over $20 billion worth of CMBS loans expiring in the next year, it is likely that more will enter into special servicing. Despite this surge, there hasn’t been a corresponding increase in delinquency rates.

Office properties with strong tenant occupancy are expected to negotiate solutions while those struggling with occupancy may continue facing challenges going forward.

About the Publisher:
Steve Griffin is based in sunny Palm Harbor, Florida. He’s an accountant by profession and the owner of GRIFFIN Tax and REVVED Up Accounting. In addition, Steve founded Madison Avenue Technology. With a strong passion for commercial real estate, he’s also dedicated to keeping you up to date with the latest industry news.

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