Finance  ·  CMBS

Stuy Town CMBS Deals Paid Off, Drop in Delinquencies to Come


Christmas may have come late for Stuyvesant Town-Peter Cooper Village investors, but they were surprised it came at all.

Thanks to Blackstone Group and Ivanhoe Cambridge, the $5.3 billion buy of the sprawling multifamily property from its special servicer CWCapital Asset Management—not including fees—paid off five commercial mortgage-backed securities deals with roughly $3 billion in exposure.

SEE ALSO: Kayne Anderson Adds Lee Levy From Goldman Sachs to Lead CRE Debt Platform

The Merrill Lynch-sponsored conduit, MLCFC 2007-6, was the first of the five to see its payday, according to recent remittance data from U.S. Bank, the trustee on the deal. The $202.2 million note accounted for 11.3 percent of the entire deal and represented 69 percent of the remaining balance of the A-1A class.

Mezzanine investors were not forgotten, with sizeable repayments of interest shortfalls. A report from Trepp noted that investors on the loan pool’s C class received interest payments that exceeded 20 percent of the class’s face amount.

While Trepp pointed to a notice from Wells Fargo regarding U.S. Bank’s data, which stated that Wells Fargo, the deal’s trustee agent, “makes no representations or warranties about the accuracy, completeness, truthfulness, and/or genuineness of any of the information,” a source confirmed that this is a standard disclaimer.

The CMBS market altogether should see a significant decline in the overall delinquency rate, especially in the multifamily sector. Multifamily is the worst performing of all the five major property types—which also include office, retail, industrial and lodging—ending 2015 with a delinquency rate of 8.28 percent. (Office, retail, industrial and lodging followed with 5.79 percent, 5.76 percent, 5.73 and 2.82 percent, respectively.)

Those four conduit deals include a $1.5 billion note in Wachovia-sponsored WBCMT 2007-C30, a $247.7 million note in Wachovia-sponsored WBCMT 2007-C31, a $250 million note the Citigroup-sponsored CWCI 2007-C2 and an $800 million note in Merrill Lynch-sponsored MLCFC 2007-5. All of those deals were paid off.

The mezzanine debt on Stuy Town—which was subject to numerous lawsuits after former owners Tishman Speyer and BlackRock defaulted on payments—should see a sizable re-pricing, according to Trepp.

“As much of the accrued interest shortfalls put a floor price under many of these classes, the flushing through of that money will require everyone to reset their expectations,” the Trepp report stated.

A representative for Wells Fargo did not immediately respond to press inquiries. A spokesman for U.S. Bank declined to comment.