CMBS: Be Afraid – $56B in Maturing Retail Loans Could Face Refinancing Troubles
News headlines have been dominated by retail giants’ woes since the recession, with Sears, J.C. Penney, Sports Authority, Macy’s and Aeropostale all announcing bankruptcies or store closures that have trickled down in the form of heavy losses for regional malls in secondary and tertiary markets.
Of the $200 billion in commercial mortgage-backed security loans set to mature by the end of 2017, approximately 28 percent are backed by retail properties.
Roughly $17.3 billion of retail loans in CMBS are set to mature this year alone, and a further $30.4 billion in 2017. Of the $17.3 billion, $2.6 billion—or 15.2 percent—is already specially serviced. Of the $30.4 billion maturing next year, $2.4 billion is specially serviced.
The numbers don’t appear to bode well for the opportunity to refinance these maturing loans, and some loans will have more of a struggle than others, according to industry experts.
I wonder what the other $144b of CMBSs that are about to mature going to do?