Fitch: 1H'16 U. S. CMBS Loan Defaults Fall Slightly; Maturity Defaults Spike
106 loans totaling $1.44 billion newly defaulted during first-half 2016 (1H'16). This figure is in-line with the 1H'15 when 109 loans totaling $1.45 billion defaulted, and slightly lower than the second half of 2015 when 106 loans totaling $1.7 billion defaulted. Office properties were the largest contributor to new 1H'16 defaults by loan balance, with 29 loans comprising 40% of 1H defaults (four of them over $20 million).
Fitch also reports 32 loans from the 2010-2016 vintages (CMBS 2.0) as defaulting in 1H'16 with a total balance of $302.1 million. This represents a significant increase from 1H'15 when eight CMBS 2.0 loans with an original balance of $69 million defaulted. Driving the increase was loans with oil and gas exposure, including properties in Houston and on the Bakken and Eagle Ford shale formations where local employment is highly dependent on oil and gas exploration.
The five largest defaults in 1H 2016 were:
--$150 million James Center, Richmond, VA;
--$116.6 million Fair Lakes Office Park, Fairfax, VA;
--$68 million Minneapolis Airport Marriott, Bloomington, MN;
--$55.9 million DHL Center, Breinigsville, PA;
--$46.2 million Northwood Centre, Tallahassee, FL.
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