Upcoming CMBS Maturities Face Refi Hurdles

NEW YORK CITY—As one measure of the volume of CMBS due to mature between now and 2017, consider that Fitch Ratings says about one-third, or 35%, of its rated universe is coming due over the next three years. The ratings agency anticipates that many of the peak-vintage loans face the prospect of being unable able to refinance at their respective maturity dates without additional capital. Furthermore, “potential higher interest rates later this year may put additional stress on their ability to refinance,” according to a Fitch report.

With approximately $20 billion of Fitch-rated loans with scheduled maturities already paid up through July of this year, the balance of 2015 will see another $10.8 billion in maturities across 1,215 loans. In addition, approximately $1.3 billion of loans due this year and $6 billion of loans scheduled to mature next year have defaulted.

By vintage, approximately 55% of the $10.8 billion in the remaining scheduled '15 maturities are from 2005 transactions and another 35% represents circa-2006 loans. The largest property type concentration is retail (37% of this year's remaining maturities), followed by office (25%) and multifamily (13%).

The largest non-specially serviced loans due to mature by year's end include the $563.9-million Kindercare Portfolio, due to mature in December; $257.5 million on the Oak Park Mall in Overland Park, KS, which also matures in December; the $192-million JQH Hotel Portfolio, maturing in October; $172.6 million on the Triangle Town Center in Raleigh, NC, which also matures in December; and the $140-million loan on Millennium Park Plaza in Chicago, which comes due this month.

Fitch notes that the Kindercare Portfolio loan was just paid off in the August distribution ahead of its December maturity date, while the JQH Hotel Portfolio and Millennium Park Plaza loans are expected to pay in full at or before their respective maturity dates. The two retail loans among the top five are less certain to refinance.

This year's total will be dwarfed by both 2016 and 2017, with a total of $119 billion in Fitch-rated CMBS coming due over those two years. The first quarter of next year will see 923 Fitch-rated loans totaling $9.6 billion come due, followed by 1,006 loans totaling $12.5 billion in Q2, 1,088 loans totaling $12.1 billion in Q3 and 1,556 loans totaling $17.6 billion. Fitch's report did not break out the '17 maturities by quarter; the year's total is 4,854 loans and $67 billion. 

Fitch's maturity figures include all performing conduit and large loans in Fitch-rated US CMBS transactions and exclude $15.3 billion of defeased loans maturing between '15 and '17. An additional $16.7 billion of non-performing loans that have scheduled maturities between now and '17 are not likely to pay off at their maturity dates, according to Fitch.

Additionally, although not included in the numbers above, many specially serviced loans may also refinance or pay off in the near term. Among the larger assets that may be disposed of this year is the $225-million loan on the Riverton Apartments complex in Harlem, which transferred to special servicing in August 2008 and has been REO since March 2010. Fitch notes that the special servicer has said a disposition is likely prior year's end as litigation alleging rent overcharging has been settled and fully resolved. The loan's original maturity date was January 2012.