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A high profile, 54-story building in the heart of Los Angeles drove late pays on U.S. CMBS loans for the third-straight month in May, Fitch Ratings said Friday.
The ratings giant said Two California Plaza, a well-known 1.3 million-square foot tower in downtown Los Angeles, failed to obtain a loan modification on a $470 million loan secured by the plaza tower.
"Last month’s failed modification attempt of Two California Plaza makes foreclosure on the trophy property now appear imminent," said Mary MacNeill, managing director for Fitch. "Two California Plaza is now the second largest loan in Fitch’s CMBS delinquency index behind only Stuy Town."
Late pays on CMBS increased 12-basis points in May to 8.65% from 8.53% in April, Fitch said. Another building that contributed to the rapid increase in late pays is the $194 million Marriott Waikiki in Honolulu, HI, which sent hotel delinquencies another 100-basis points higher when compared to the previous month.
Delinquency rates on office properties grew in May to 8.64% from 8.36% in April. Meanwhile, multifamily delinquencies decreased from 11.64% in April to 11.35% last month.
Retail properties saw delinquencies jump from 7.39% to 7.45% in May, while hotel properties saw delinquencies jump from a rate of 10.20% in April to 11.15%.
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