The modification of the Farallon portfolio, which has a $1.6 billion whole loan balance, is part of a wave of large-loan servicing activity noted in recent commercial mortgage-related securities reports.
The modification noted Monday by Barclays’ researchers in their continuing analysis of the most recent remittance report, like most large loan activity, is being watched closely because of the potential for outsized deals to serve as indicators and/or inordinately influence the overall market.
Other recent large loan activity from the May remittance report that Barclays has noted has included the liquidation of the W Hotel in San Diego. The hotel had been in REO since July. Rockpoint Group bought it for about $56 million, which compares to Sunstone Hotel Investors’ acquisition of it for $96 million in 2006. The liquidation wiped out three tranches of a related securitization (K through M) and was said to have partially wiped out a fourth tranche (J).
In a recent analysis of Fitch reports, Barclays also said two other loans it considers to be “large” have transferred into special servicing: the $237.3 million Hines portfolio and the $180 million Bank One Center in Dallas.
In a recent analysis of U.S. commercial real estate loan collateralized debt obligations, Fitch said there was a substantially higher amount of realized losses from the disposal of credit impaired and defaulted assets in April. These losses totaled about $164 million during the month, up from $73 million the previous month.
Fitch director Stacey McGovern said many of the losses resulted from foreclosure or deed-in-lieu actions that wiped out subordinate positions.
