A significant new entry to the list is the $227.9-million Resorts International Casino Portfolio loan, secured by a three-hotel/gaming portfolio in Atlantic City and Robinsonville and Tunica, MS. Fitch says it transferred to special servicing on July 23 after the borrower failed to make the July payment, citing significant declines in cash flow at the properties, although the loan is performing.

"Properties directly tied to consumer spending, such as hotels, are the first to exhibit signs of performance declines," says Adam Fox, Fitch senior director, in a release.

As of July 31, Fitch had designated 5,993 loans totaling $80.7 billion, or 17% of its US CMBS portfolio, as loans of concern. About 12% of Fitch's loans of concern were originated in 2006 and 2007. Seven-hundred-and-thirty-six of these loans have outstanding balances of greater than $20 million, while 146 have balances greater than $100 million.

Fitch's currently rated CMBS portfolio encompasses 464 transactions with an unpaid principal balance of $472.1 billion. As of July 31, the agency's loan delinquency index for loans 60 days delinquent, in foreclosure or REO was 3.04% on the basis of 1,857 such loans representing $14.3 billion in UPB.

The ratings agency expects the LDI to reach 5% by year's end, as an increasing number of loans roll over from 30 days' past due to 60 days. Along with the usual suspects—stressed fundamentals due to economic factors such as low consumer spending—Fitch also cites loans with low debt service coverage that are close to depleting their reserves.

Biggest of the loans in Fitch's LDI is a $207.9-million borrowing secured by the 556,835-square-foot in-line portion of Woodbridge Center, a 1.6-million-square-foot regional mall in Woodbridge, NJ. Part of the General Growth Properties portfolio, the loan was included in GGP's April bankruptcy filing.

Also in the top 10 of delinquent loans is a $164.8-million loan secured by another GGP property, the 939,085-square-foot Jordan Creek Town Center in West Des Moines, IA, while a $258.5-million financing secured by GGP's Providence Place Mall in Providence, RI is among the top 10 performing loans in special service. Two other loans in the top 10 of delinquent loans are secured by retail properties, three by hotels, two by multifamily portfolios and one by a portfolio of assisted-living properties.

Biggest of the performing loans in special service is the Extended Stay Portfolio, a $4.1-billion financing secured by 664 financed hotels, 17 leased hotels, an office building and a vacant parcel. Fitch says it went into special servicing on June 16, the day after Extended Stay filed for bankruptcy.

Among loans that are current but which Fitch considers loans of concern, the largest by far is a $3-billion financing secured by the 56-building Peter Cooper Village/Stuyvesant Town multifamily complex. As GlobeSt.com reported earlier this week, Fitch believes the debt service reserves will run out by the end of this year and that default is likely if an equity infusion or recapitalization does not take place. Tishman Speyer Properties, one of the loan sponsors along with BlackRock Realty, had no official response to Fitch's prediction.

Instant Insights /

Problem CMBS Loans Up 7% in Two Months

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