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Portals I $155M CMBS Loan Becomes Delinquent

WASHINGTON, DC—Blame it on the “wall of maturities” and the drop in credit quality since these loans were originated, Trepp's Sean Barrie tells GlobeSt.com.

By Erika Morphy | erikamorphy | | Updated on August 17, 2016
Portals I. Photo by Trepp/CoStar Portals I. Photo by Trepp/CoStar
WASHINGTON, DC—The $155 million loan backing the 449,413-square foot Portals I office building in Southwest Washington DC became newly delinquent in July, according to Trepp . It was listed as non-performing beyond maturity, Trepp said. The loan was transferred to special servicing in May 2016 for an imminent default, and “subsequently defaulted on the 6/6/16 maturity payment,” according to the special servicer’s commentary.  After plans of refinancing fell through, the borrower requested a modification which is currently being evaluated, the special servicer said. Portals I is part of the Republic Cos.’ master-planned Portals, a 1.5-million square foot mixed-use development that includes the 400-room Mandarin Oriental Hotel. There are two remaining phases to be delivered: a 400-unit residential tower, or Portals V, and another office building, which will be Portals IV. The reason for Portals I default appears to be an occupancy rate of 70%, Barrie said. The delinquency helped nudge Trepp CMBS Delinquency Rate higher for the fifth straight month. The delinquency rate for US commercial real estate loans in CMBS is now 4.76%, an increase of 16 basis points from June. This rising trend is not the norm, Trepp said.  “Right now we are in the so-called ‘wall of maturities.’   Given that credit quality in these loans have dipped since they were issued it is not surprising they are taking longer to reach maturity payments.”

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