The transfer of large balance CMBS loans to special servicing continues to increase as commercial property performance declines, Fitch Ratings reported.
An additional $1.2 billion of loans in Fitch-rated CMBS entered special servicing, with a high-profile hotel property in Washington D.C. among the new entries.
Among the 95 new loans in special servicing include the Renaissance Mayflower Hotel. This is a $217 million hotel property located in Washington D.C. that transferred to special servicing on Nov. 6 for imminent default after the borrower indicated it would no longer be able to cover debt service.
This latest entry is in line with Fitch's expectations that retail and hotel properties will continue seeing the most adverse and immediate effects.
"Additional high-profile hotel properties transferring to special servicing are likely," said Senior Director Adam Fox.
The rating agency also noted that the $3 billion Peter Cooper Village/Stuyvesant Town loan became the second largest loan to officially transfer to special servicing.
The 11,227 square-foot New York apartment complex moved over to special servicing on Nov. 6, as expected.
With the November increase, specially serviced loans now total 7.8% of Fitch rated CMBS.