DC, NYC Loans Driving CMBS Defaults

WASHINGTON, DC-More loans from the Washington, DC area are moving into special servicing–including the city’s Renaissance Mayflower Hotel, a $217 million property that transferred in November 2009 when Rockwood Capital LLC was no longer able to cover debt service.

According to Fitch Ratings, an additional $1.2 billion of loans in Fitch-rated CMBS entered special servicing–including the high-profile hotel property in Washington, DC–in November. Also included in the 95 new loans was New York City’s $3-billion Peter Cooper Village/Stuyvesant Town loan, which became the second largest loan to officially transfer to special servicing. With the November increase, specially serviced loans now total 7.8% of Fitch-rated CMBS.

The Mayflower’s inauspicious status is indicative of larger trends in the retail and hotel asset classes, which Fitch says will continue to see the most adverse and immediate effects. Additional high-profile hotel properties transferring to special servicing are likely, according to senior director Adam Fox. Fitch Ratings was unable to return a call in time for publication.