Fitch: Large Hotels Lead Loans of Concern for U.S. CMBS

NEW YORK, NY-- Eight newly defaulted loans greater than $100 million have entered special servicing, according to Fitch Ratings in the latest edition of it's 'What's in Special Servicing' U.S.CMBS report.

Recent defaults include two hotel portfolios, Red Roof Inn andExtended Stay.

Since Fitch's last update in April, $17.4 billion in Fitch-rated loans have entered special servicing, which does not include the Extended Stay Portfolio, which on its own totals over $4 billion.

'Four of the 10 largest delinquent loans have experienced appraisal reductions as a result of value declines, indicating that losses may be significant in their respective deals' said Managing Director MaryMacNeill. 'Of over 2,000 specially serviced loans, 64 have balances in excess of $100 million.'

Property performance has not deteriorated significantly since Fitch's last update among loans of concern such as the Riverton Apartments and PeterCooper Village/Stuyvesant Town.(top right photo)

However, 'Cash flow from Riverton and PeterCooper Village/Stuyvesant Town still requires significant reserves to cover debt service obligations, and these reserves will likely be depleted by the end of the year,' said MacNeill.

Fitch has classified over $75 billion or 18% of its rated U.S. CMBS portfolio as loans of concern. Recent vintage loans account for over 11% ofthe $75 billion.

The fourth edition of 'What's in Special Servicing?' is available at'www.fitchratings.com' under the following headers:Sectors >> Structured Finance >> CMBS >> Research

Contacts:

Mary MacNeill +1-212-908-0785, Adam Fox +1-212-908-0869, or LisaCook +1-212-908-0665 New York.

Sandro Scenga, Senior Director, Corporate Communications, Fitch Ratings+1-212-908-027, Ssandro.scenga@fitchratings.com