CMBS Mall Delinquencies Approach $10 Billion, as the Pandemic Heightens Risk for Upcoming Maturities
The Coronavirus Disease (COVID-19) pandemic has been particularly difficult for retail and hospitality properties, many of which back commercial mortgage backed securities (CMBS) loans. In April, we explored the CMBS sector’s exposure to near-term maturing mall loans, highlighting the unique risks of an environment that would not be conducive to sponsors’ ability to secure takeout financing for that property type in particular. With regional mall delinquency rates increasing rapidly due to declining sales and occupancy, key factors to the restructuring process—including market position, stability of the asset, and borrower strength—will determine the likelihood of ultimate success.
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