Latest news with #CMBS
Yahoo
4 days ago
- Business
- Yahoo
KBRA Releases Research – CMBS Loan Performance Trends: May 2025
NEW YORK, May 30, 2025--(BUSINESS WIRE)--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the May 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS in May increased to 7.4% from 7.1% in April. The total delinquent plus current but specially serviced loan rate (collectively, the distress rate) increased 85 basis points (bps) to 10.9%. Office and mixed-use sectors saw significant increases to their distress rate this month due to transfers in some single-asset single borrower (SASB) loans, which are detailed in this report. In May, CMBS loans totaling $3.6 billion were newly added to the distress rate, of which 68% ($2.5 billion) comprised imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (55.4%, $2 billion), followed by mixed-use (29.7%, $1.1 billion), and retail (8.2%, $299 million). Key observations of the May 2025 performance data are as follows: The delinquency rate increased to 7.4% ($24.5 billion) from 7.1% ($23.4 billion) in April. The distress rate increased to 10.9% ($35.8 billion) from 10% ($32.8 billion) last month. The office distress rate climbed 204 bps this month to 17.2%. The sector saw one of its highest increases in recent months as 1211 Avenue of the Americas ($1 billion in AOTA 2015-1211) was transferred to special servicing ahead of its August maturity date. In conduits, State Farm Portfolio ($323.9 million in four deals) was transferred to the special servicer for nonmonetary default. The increase in distress rate also reflects the addition of three midsize loans ranging from $103.7 million to $211 million, as well as 19 smaller loans under $50 million with an average balance of $22.8 million. Mixed-use's delinquency rate shot up 445 bps mainly due to two SASB loans. JPMCC 2022-NLP Portfolio with $1 billion in JPMCC 2022-NLP became a nonperforming matured balloon and Stonemont Portfolio with $514.7 million in JPMCC 2020-NNN flipped to foreclosure. Among all major property types, retail showed the highest decrease in delinquency this month at -92 bps. Significant loans like Destiny USA Phase I and II ($328.8 million and $142.5 million, respectively, in JPMCC 2014-DSTY) and Carolina Place ($142.9 million in two conduits) became performing matured balloons as they are in the process of modifications but remain with the special servicer. The distress rate also saw a decrease as White Marsh Mall with $186.8 million in two conduits returned to the master servicer as an extension was granted with a maturity in May 2027. In this report, KBRA provides observations across our $340 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower and large loan transactions. Click here to view the report. Recent Publications KBRA Global Rating Stability and Transition Study: 2011-2024 Assessing the Ripple Effect: Tariff Uncertainty Clouds Structured Finance Outlook From Origination to Stabilization: Can CRE CLOs Bridge the Gap? New York City Leads CMBS Multifamily Issuance as Distress Jumps KBRA Examines CMBS GSA Risk Amid Government Cuts 2024 CMBS Loan Maturities: Payoff Rates Decrease KBRA CMBS Loss Compendium Update: December 2024 CMBS Loan Performance Trends: April 2025 CMBS Trend Watch: April 2025 About KBRA KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions. Doc ID: 1009693 View source version on Contacts Aryansh Agrawal, Senior Analyst+1 Robert Grenda, Managing Director+1 Business Development Contact Andrew Foster, Director+1 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Business Wire
4 days ago
- Business
- Business Wire
KBRA Releases Research – CMBS Loan Performance Trends: May 2025
NEW YORK--(BUSINESS WIRE)--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the May 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS in May increased to 7.4% from 7.1% in April. The total delinquent plus current but specially serviced loan rate (collectively, the distress rate) increased 85 basis points (bps) to 10.9%. Office and mixed-use sectors saw significant increases to their distress rate this month due to transfers in some single-asset single borrower (SASB) loans, which are detailed in this report. In May, CMBS loans totaling $3.6 billion were newly added to the distress rate, of which 68% ($2.5 billion) comprised imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (55.4%, $2 billion), followed by mixed-use (29.7%, $1.1 billion), and retail (8.2%, $299 million). Key observations of the May 2025 performance data are as follows: The delinquency rate increased to 7.4% ($24.5 billion) from 7.1% ($23.4 billion) in April. The distress rate increased to 10.9% ($35.8 billion) from 10% ($32.8 billion) last month. The office distress rate climbed 204 bps this month to 17.2%. The sector saw one of its highest increases in recent months as 1211 Avenue of the Americas ($1 billion in AOTA 2015-1211) was transferred to special servicing ahead of its August maturity date. In conduits, State Farm Portfolio ($323.9 million in four deals) was transferred to the special servicer for nonmonetary default. The increase in distress rate also reflects the addition of three midsize loans ranging from $103.7 million to $211 million, as well as 19 smaller loans under $50 million with an average balance of $22.8 million. Mixed-use's delinquency rate shot up 445 bps mainly due to two SASB loans. JPMCC 2022-NLP Portfolio with $1 billion in JPMCC 2022-NLP became a nonperforming matured balloon and Stonemont Portfolio with $514.7 million in JPMCC 2020-NNN flipped to foreclosure. Among all major property types, retail showed the highest decrease in delinquency this month at -92 bps. Significant loans like Destiny USA Phase I and II ($328.8 million and $142.5 million, respectively, in JPMCC 2014-DSTY) and Carolina Place ($142.9 million in two conduits) became performing matured balloons as they are in the process of modifications but remain with the special servicer. The distress rate also saw a decrease as White Marsh Mall with $186.8 million in two conduits returned to the master servicer as an extension was granted with a maturity in May 2027. In this report, KBRA provides observations across our $340 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower and large loan transactions. Click here to view the report. Recent Publications About KBRA KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions. Doc ID: 1009693
Business Wire
5 days ago
- Business
- Business Wire
KBRA Releases Research – Data Centers: A Comparison of ABS and CMBS Structures
NEW YORK--(BUSINESS WIRE)--KBRA releases research examining the differences between asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS) for data center transactions, providing insight into how these distinctions may influence an issuer's choice of structure or an investor's allocation decision. With the increasing adoption of cloud-based solutions and artificial intelligence (AI), data centers have emerged as a critical asset class in recent years, requiring massive capital for construction, expansion, and operations (see our October 2024 report for a broader discussion of the data center industry as a whole). As a result, data center owners have been increasingly tapping into structured finance capital markets to fund their portfolios, leveraging asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS) structures in both public and unpublished transactions. Issuers have used ABS structures since 2018—and, beginning in 2021, CMBS single-borrower structures—to finance large data center assets, accounting for $48.69 billion in issuance across 88 transactions in the U.S. ABS structures have accounted for 70.8% of that issuance (75 deals, $459.7 million average deal balance), with CMBS accounting for the remaining 29.2% (13 deals, $1.09 billion average deal balance). As of May 2025, year-to-date (YTD) issuance has been roughly evenly split between ABS and CMBS structures. European data center issuance has also emerged in the past year, with one securitization backed by UK collateral in 2024 and another backed by German collateral in 2025—both transactions utilized ABS structures. ABS and CMBS deals have generally been backed by built and stabilized cash-flowing assets with little to no remaining construction or lease-up risk. Separately, issuers have also started using project finance structures, which are typically used to finance assets that are under construction. In determining whether to pursue an ABS or a CMBS structure, property owners and sponsors, in conjunction with their bankers, face a number of considerations, including financial and operational flexibility, pricing, availability of capital, and the nature of the issuer's ownership interest. This report explores the differences between ABS and CMBS data center transactions, which may provide insight into how these distinctions may influence an issuer's choice of structure or an investor's allocation decision. It provides a general overview in lieu of covering all variations of these structures, and it focuses primarily on U.S. transactions unless otherwise noted. Click here to view the report. Recent Publications About KBRA KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions. Doc ID: 1009641
Bloomberg
27-05-2025
- Business
- Bloomberg
Office-Bond Bet Gone Wrong Deals Lord Abbett a $60 Million Blow
Lord Abbett & Co. was dealt a more than $60 million blow on a commercial mortgage-backed security tied to an office campus in suburban Kansas City, after the underlying loan was sold at a steep discount. The money manager owned the vast majority of the $233 million CMBS, which was backed by the mortgage on the Aspiria office campus, formerly the headquarters of telecom giant Sprint Corp. The riskiest portion of the securitization, with a face value of more than $65 million, was wiped out earlier this month after the loan's sale left just $164 million to distribute to creditors, according to the latest monthly remittance report.
Yahoo
26-05-2025
- Business
- Yahoo
AGNC Vs STWD: Which mREIT Has Stronger Income Potential?
AGNC Investment Corp. AGNC and Starwood Property Trust, Inc. STWD are two of the known names within the mortgage real estate investment trusts (mREITs) industry. Both offer favorable long-term stockholder returns and a massive dividend yield. But which one offers the better opportunity for investors right now? Let us break down the strengths, risks and growth potential of AGNC and STWD. AGNC Investment adheres to an active portfolio-management policy, which includes re-evaluation and adjustment of its portfolio, as well as hedges amid a varying interest rate and mortgage market environment. The company is operating in a more defensive position with significant hedge protection due to market volatility. Over the recent quarters, the company has made pronounced efforts to reposition its portfolio to offset risks related to interest rates and prepayment uncertainty. As of March 31, 2025, the company maintained a significant interest rate hedge position, which covered 91% of the outstanding balance of its Investment Securities Repo, TBA position and other debt. Such prudent asset-selection efforts may offer greater stability of cash flows and bode well for long-term growth. The Government-sponsored enterprise guarantee for the principal and interest payments makes Agency mortgage-backed securities MBS a safer investment choice. Spread widening and mortgage market volatility affected existing Agency MBS investments' performances. Nonetheless, the long-term investment outlook for the company's new Agency MBS is with $77.9 billion of Agency MBS in its investment portfolio (as of March 31, 2025), AGNC Investment is expected to enjoy attractive risk-adjusted returns within the fixed-income markets. The company enjoys a decent financial position. It has solid access to attractive funding across a broad spectrum of counterparties and financing conditions. As a result, it has flexibility in the opportunistic enhancement of its portfolio. As of March 31, 2025, AGNC Investment's liquidity, including unencumbered cash and Agency MBS, was $6 billion. The company's leverage increased modestly to 7.5X at the end of the first quarter (from 7.2X in the prior quarter). It has a long-term debt of $62 million as of the same date. Starwood Property is a leader in investing in commercial mortgage-backed securities (CMBS) and related commercial real estate assets, with a diversified portfolio of $1.02 billion as of March 31, 2025. This allows it to generate stable income streams while capitalizing on market opportunities. The company's asset management expertise and ability to navigate the complexities of the CMBS market contribute to its strong market position and growth potential moving forward. Starwood Property has been actively engaged in acquisitions and divestitures to optimize its portfolio. In February 2024, the company sold 16 retail properties in its Master Lease Portfolio for $387.1 million, recognizing a gain of $92 million. Additionally in 2024, it sold an operating property within its Real Estate Investment and Services Equity Portfolio for $18.2 million, with an increase of $8.3 million, reflecting continued portfolio optimization. Also, the same year, the company also sold residential units in a New York conversion project, totaling $12.1 million in proceeds, though with no gain or loss recognized. Meanwhile, there were no significant acquisitions recently, aside from properties acquired through loan foreclosure. This strategy of selective sales and reinvestments supports the company's ongoing focus on enhancing its portfolio. However, Starwood Property's weak liquidity position is concerning. As of March 31, 2025, the company had cash and cash equivalents of $692 million. Its long-term debt was $18.4 billion. This is likely to be concerning if the macroeconomic situation worsens. In the past year, shares of STWD and AGNC have risen 13.6% and 6.3%, respectively, compared with the industry's growth of 1.9%. Image Source: Zacks Investment Research In terms of valuation, Starwood Property is currently trading at a 12-month forward price-to-earnings (P/E) of 10.55X, lower than its five-year median of 10.56X. Then again, the AGNC stock is currently trading at a 12-month forward P/E of 5.39X, which is lower than its five-year median of 5.47X. Image Source: Zacks Investment Research AGNC Investment is trading at a discount compared with the industry average of 7.78X, while Starwood Property is trading at a premium. Hence, AGNC is a better choice for value investors. Both companies regularly pay dividends. AGNC Investment has a dividend yield of 16.29%, whereas Starwood Property has a dividend yield of 9.83%. AGNC has a higher dividend yield than the industry's average of 11.29%. Here, also, AGNC Investment holds an edge over STWD. Image Source: Zacks Investment Research The Zacks Consensus Estimate for AGNC Investment's 2025 and 2026 earnings has been unchanged over the past week, indicating stability in analyst expectations. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.) Image Source: Zacks Investment Research The Zacks Consensus Estimate for Starwood Property's 2025 and 2026 earnings has been revised downward over the past week, suggesting a more cautious outlook from analysts. Image Source: Zacks Investment Research AGNC Investment's exclusive focus on Agency MBS, backed by government-sponsored enterprises, creates a highly secure income stream. The principal and interest payments on these securities are effectively guaranteed, making its portfolio less prone to credit risks than Starwood Property's commercial CMBS and broader commercial real estate debt investments. AGNC's management is highly proactive, evidenced by a hedge position covering 91% of its exposure as of March 31, 2025. This aggressive hedging strategy significantly reduces interest rate and prepayment risks, which are critical for mREITs. Meanwhile, STWD's risk profile is higher, with earnings sensitive to commercial real estate market dynamics, including commercial loan performance. AGNC Investment offers a stunning dividend yield that is substantially better than both Starwood Property and the mREIT industry average. This outsized yield is a compelling draw for income-seeking investors. While STWD has delivered stronger price performance over the past year than AGNC, much of this growth is priced in and future growth may be constrained by the uncertain commercial real estate market. Conversely, AGNC Investment offers consistent cash flows from its Agency MBS portfolio, and maintains ample liquidity and hedging to support long-term growth. At present, AGNC Investment carries a Zacks Rank #3 (Hold), while Starwood Property carries a Zacks Rank #4 (Sell). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AGNC Investment Corp. (AGNC) : Free Stock Analysis Report STARWOOD PROPERTY TRUST, INC. (STWD) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
