Forbearance risks highlight Cantor's $271M large-loan CMBS
Despite uncertainties over mounting forbearance requests of commercial tenants, the commercial real estate lending arm of Cantor Fitzgerald is proceeding with plans to market approximately $237 million in bonds backed by commercial loans of multifamily, office, retail and mixed-use properties.
According to public filings with the Securities and Exchange Commission, Cantor Commercial Real Estate (CCRE) is contributing 14 loans secured by 43 properties to a transaction dubbed CP 2020-P1.
Many of the properties have already been inundated with rent-relief requests from tenants, according to Kroll Bond Rating Agency. The forbearance requests include the sole borrower of the largest loan in the pool, a $50 million trust participation in a loan for the AVR Atlanta Airport Marriott Gateway hotel.
According to Kroll, plans are in place for servicer advancements of principal and interest payments that should “help maintain timely interest payments to the rated securities.”
But the agency cautions that with the uncertainty of the depth and duration of the coronavirus outbreak, “such loans may also be at risk of transfer to the special servicer” to be designated for the transaction.
All of the loans were assigned to the CF 2020-P1 trust by Cantor Commercial Real Estate, according to an ABS-15G disclosure filing with the SEC.
Kroll has issued preliminary ratings to the $271 million transaction, including an AAA rating to a $194.5 million Class A tranche, a $27.8 million Class B tranche (rated A-) and a $14.1 million Class C tranche (rated B).
The sponsoring trust will retain a $34.7 million balance for risk-sharing purposes, according to Kroll’s presale report.
Kroll is rating the deal as a single, large-loan CMBS transaction due to its high concentration level, even though the 14 fixed-rate loans have the features of a conduit transaction and includes a mix of multifamily, mixed use, lodging, office and retail properties.
All of the properties are expected to be impacted by the COVID-19 pandemic “to varying degrees.”
Among the mortgaged assets in the pool are the Atlanta Airport Marriott Gateway (the only lodging property in the pool), the 3,321-unit Parkmerced multifamily development in San Francisco and a portfolio of 27 Class-B mid- and high-rise buildings in New York City’s Manhattan and Brooklyn boroughs.
CCRE is Cantor’s integrated CRE finance company. The firm’s most recent securitization was a $719 million portfolio of loans priced last December, according to data from Finsight.