CoStar News
Summary:
In November, the number of distressed office properties backed by commercial mortgage-backed securities loans increased by 1.1%, reaching a total of 762 buildings, with a 30% vacancy rate. The distress level may improve as some properties recently received loan modifications. Notable among these is a portfolio of nearly 150 properties in Pennsylvania, securing a $1.27 billion loan, set to be removed from special servicing after a two-year loan extension by Workspace Property Trust. In downtown Philadelphia, the servicer deemed a $126 million loan on the Wanamaker Building nonrecoverable, with an updated appraised value 71.8% below the 2018 value.
Additionally, final offers are being reviewed for the Countryside Mall in Clearwater, Florida, which faced credit rating downgrades, leading to potential losses in a CMBS deal. The 1.4 million-square-foot mall, managed by special servicer Midland Loan Services, was transferred to special servicing in June 2020. JLL is overseeing leasing and management, and while the mall’s value has risen, a pending transaction is under review for approval.