NEW YORK--(BUSINESS WIRE)--Defeasances for loans in U.S. CMBS 2.0 have seen an uptick so far this year, according to Fitch Ratings in its latest U.S. CMBS weekly newsletter.
Fitch has provided rating confirmations for 26 defeased loans in CMBS thus far in 2014, three of which were from CMBS 2.0 transactions. Furthermore, the three 2.0 defeasance requests all occurred in July. Two were in 2011 transactions and one in a 2010 transaction. Each of the loans has five-year terms.
The sudden appearance of CMBS 2.0 requests is likely the start of an expected increase in defeasance activity. Borrowers are taking advantage of increased property cash flows and reduced coupons that have occurred since the loans were originated early in the CMBS 2.0 cycle.
In comparison, in 2013 25 were from 2004, 24 from 2005, seven from 2006 and five from 2007. The remaining requests were from 1997-2002 vintages and one from the BALL 2009-FDG single borrower transaction that fully defeased in November 2013. At the end of June 2013, Fitch had reviewed the same number of defeasance as of June this year. However, the total increased to 70 by year end 2013.
The CMBS 2.0 defeasances reviewed in 2014 included:
--1412 Broadway: $80.1 million and the third largest loan in WFRBS 2011-C2 (6.4%);
--Murdock Plaza: $53 million and the eighth largest loan in MSC 2011-C1 (3.6%); and
--A $30 million loan in a 2010 vintage deal (defeasance not yet closed).
Fitch provides rating confirmations for the largest ten loans in a transaction; therefore, the statistics do not include defeasance of any smaller loans.
Additional information is available in Fitch's weekly e-newsletter, 'U.S. CMBS Market Trends', which also contains recent rating actions and an overview of newly released CMBS research, including Fitch presales and Focus reports. The link below enables market participants to sign up to receive future issues of the E-newsletter:
Additional information is available at 'www.fitchratings.com'.