Troubled CMBS Loan Count Drops

Wall Street Journal

By Eliot Brown

The delinquency rate for commercial mortgage-backed securities fell for the second straight month in June, reversing a long climb that accompanied the economic downturn. The delinquency rate for June stood at 9.37%, down from 9.6% in May and a record high of 9.65% in April, according to loan research service Trepp LLC.

The decline comes in large part as special servicers—the firms that work out troubled loans—have been working through a backlog, stepping up the pace at which they sell off mortgages. In all, $1.8 billion CMBS loans were liquidated in June, according to Trepp, the highest in at least 18 months.

What explains the pickup? Analysts at Barclays Capital point to the thaw in the lending sector, as banks are once again willing to lend money for a wide array of commercial property, although generally on less liberal terms than they did in 2006 and 2007.

“We believe much of the current spurt in liquidations stems from a favorable lending environment coupled with low interest rates and low cap rates,” Barclays analysts wrote. “As a result, many assets that had been sitting on special servicing books for years and were hard to sell even a year ago are now being disposed of.”

Virginia MacKoul

Virginia is a graduate from the University of Florida's College of Design Construction and Planning with a degree in Sustainability and the Built Environment, and a minor in Urban Regional Planning. Virginia joined the Front Street team in 2011, as an intern. Upon graduation, Virginia joined the Front Street team full-time as the Director of Client Services. Ms. MacKoul’s addition furthers Front Street’s continued growth and expansion within Gainesville and other North Central Florida markets. She was promoted to Director of Marketing in 2014 and now manages the firm’s team of interns and oversees all marketing and branding activity. Virginia was born in Boston and moved to Lee County, Florida in 1997. Virginia graduated her high school's International Baccalaureate program and started at the University of Florida with a focus on Architecture. Virginia shares Front Street's passion of giving back to the community and those in need. Virginia's hobbies include photography, cooking, football, movies, music, and spending time with her dog, Brinkley.

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