CMBS

A survey of 177 fund managers and institutional investors shows investors are still "jumping in", particularly in higher-rated tranches that continue to perform.

Debt delinquencies have soared for mall owners, which lost market share to e-commerce and were hit with tenant bankruptcies even before the pandemic forced shoppers and diners to stay home. By last month, more than 9% of retail commercial mortgage-backed securities were managed by special servicers.

As Las Vegas opens back up to tourists, MBS investors are being asked to roll the dice on the lodging industry that has been conspicuously absent from recent conduit deals amid the COVID-19 outbreak.

But deal sponsors are primarily restricting property assets to the lower risk multifamily and office buildings that lenders are more confident will weather the economic strains brought by the coronavirus pandemic.

Barclays Commercial Mortgage Securities Mortgage Trust 2020-C7 is backed by a pool of 49 fixed-rate loans collateralized by 153 commercial properties – of which 17 loans are tied to multifamily/manufactured housing properties representing 35.4% of the pool balance.

The private equity firm's REIT arm is seeking to price a second CRE loan portfolio for May, this time led by an industrial portfolio of warehouses and logistics centers. No hotel or shopping mall loans are included.

Sellers are currently willing to concede discounts of around 5%, while bidders are hoping for about 20% off pre-pandemic prices. That estimated gap, which is likely wider in specific cases, has put a freeze on deals.

Goldman Sachs and Morgan Stanley are backing the first commercial mortgage-backed securities activity in two months, through two deals that exclude hotel or department store retail assets that are most exposed to pandemic-related stresses.

More details have emerged about the damage the coronavirus pandemic is inflicting on the hospitality industry. One servicer alone has received 2,000 workout requests in the past month.

Despite multiple hotel, multifamily and retail tenants are seeking rent relief, borrowers are confident that servicer advances will cover interest payments on Cantor's next CMBS transaction.