Originally published in The Fine Print
Many commentators have expressed that the next wave of real estate investment opportunities will come from maturing/ defaulting CMBS loans. "CMBS" refers to "commercial mortgage backed securities" in which, instead of being held by a single bank, a mortgage loan or pool of mortgage loans is held by a bank or other institution as Trustee for the benefit of multiple bond or certificate holders. Typically, in a CMBS loan, a "master servicer" is responsible for managing the borrower payments and distributions to bondholders while the loan is current and not in default, and a "special servicer" is responsible for managing the loan and the mortgaged real estate asset when there is a default or imminent default. The rights and obligations of the master servicer and the special servicer are set out in a "PSA", i.e., a Pooling and Servicing Agreement.
Approximately $53.3 billion of CMBS loan will mature in 2012 and over $390 billion will mature between 2012 and 2016. CMBS investment opportunities may exist, but it is not always easy for investors to find the asset, to find the right person to talk to about the asset, and then to strike a deal with that person. Special servicers managing distressed CMBS loans are typically servicing a large portfolio of problem assets. The high-dollar assets are understandably more likely to get the attention of the special servicers, who may not be as responsive to investors looking at smaller deals.
Would you like to know which CMBS assets are on the CMBS "watchlist" in the greater Orlando SMSA? Take a look at the map reflecting information current as of November 19, 2012.
A similar search and map can be done for every County or metropolitan area in Florida, in any specific asset class a client may wish to identify.
If you need to identify special servicers in charge of a particular Florida CMBS asset, or tenants, income, occupancy rates, appraised value, loan balance and more, please let us know. Members of our firm's multi-disciplinary Distressed Real Estate Solutions Group advise investor clients on the acquisition of distressed CMBS loans and assets in all asset classes. We also assist borrower clients in negotiating and documenting loan modifications to existing CMBS loans.
For more information about our Distressed Real Estate Solutions Group, please visit: http://bit.ly/WbOsow
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.