Loans within commercial mortgage-backed securities (CMBS) are transferring to special servicing in larger batches and with increasing speed, ""Fitch Ratings"":http://www.fitchratings said in its weekly U.S. CMBS newsletter.
[IMAGE]Last month saw 248 loans totaling $4.27 billion move into special servicing. Master servicers hand off loans to ""special servicers"" when it becomes clear the borrower is on the verge of default, in the hopes that the specialty servicer can return the asset to performing status or negotiate a pay off.
[COLUMN_BREAK]The amount of the loans that made this transition last month in the CMBS world represents four times the balance that transferred in January of last year, Fitch said. The ratings agency's analysis shows that the size of individual specially serviced loans has increased 2.4 times from 2009 to $17.2 million, with five loans greater than $100 million each.
""More loans will approach final maturity without available extensions or a refinancing commitment,' said Mary MacNeill, a managing director at Fitch. ""Available liquidity remains limited, which is making refinancing large loans more difficult even when they are performing.""
According to Fitch, the hotel sector has the fewest number of specially serviced loans, but the largest dollar amount at stake. The ratings agency breaks down the number of CMBS loans in special servicing as follows:
* Hotel: 275 loans, worth $11 billion
* Multifamily: 872 loans, worth $9.8 billion
* Office: 509 loans, worth $7.5 billion
* Retail: 842 loans, worth $15 billion