The addition of 432 commercial real estate  loans  roughly $5.2  billion  resulted  in a 7%
rise  in  U.S.  CMBS  Loans  of Concern between June and last month, said Fitch Ratings in its latest edition of What's in Special Servicing.

A  notable  entry, according to the rating agency,  is  the $227.9 million Resorts International Casino portfolio  loan,  which  transferred to special servicing in July as a result of  monetary  default  when  the  borrower failed to make their July payment. The company cited considerable declines in cash flow at the properties.

"Properties directly  tied  to  consumer  spending  such  as hotels are the first to exhibit signs of performance declines," said Adam Fox, a senior director at the rating agency.

Declining  property  performance  as well as increasing  CMBS  defaults withiin are still the main contributors to the increasing number of Loans of Concern.

Fitch  designated  loans with declining performance as a concern since they have a higher  probability  of future default and current market conditions would result in considerably higher losses if the loans were liquidated in today's market.

To  date,  the rating agency  has  identified  above $80.7 billion in commercial real estate  loans (17% of its rated U.S. CMBS portfolio) as having declining performance  or  defaulted loans, otherwise known as Loans of Concern.

Recent  vintage loans account for over 12% of the $80.7 billion in Loans of Concern.

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