CMBS Loan on Four Stamford Office Buildings Owned by RFR Hits Special Servicing
By Andrew Coen September 13, 2024 2:05 pm
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A $247.2 million commercial mortgage-backed securities (CMBS) loan backing four office buildings in Stamford, Conn., has entered special servicing after failing to pay off at its scheduled August 2024 maturity, according to a report from Morningstar.
The Stamford Plaza Portfolio, owned by RFR since 2007, has encountered distress due to decreasing occupancy and cash flows throughout the four buildings totaling 986,0000 square feet in Downtown Stamford. The loan, which was originated as part of the GSMS 2014-GC24, CGCMT 2014-GC25 and WFRBS 2014-C22 deals, was initially added to the servicer’s watchlist in October 2018 for occupancy and debt service coverage ratio concerns, according to Morningstar.
“Given that this is nearly a million square feet across four buildings, the tenant base is naturally a bit granular,” said David Putro, senior vice president and head of commercial real estate analytics at Morningstar. “You have declining occupancy in a submarket with rather high vacancy, so refinancing in this environment just wasn’t going to happen.”
The loan was added to the serviver’s watchlist in July 2024, which noted it was getting monitored due to a debt service coverage ratio of just 0.58, well below the acceptable credit threshold of 1.10, according to CRED iQ. No tenants with expired leases over the next 12 months have more than 10 percent net rentable area in the portfolio, according to the watchlist commentary.
The special service transfer of the Stamford Plaza Portfolio loan comes seven months after Morningstar downgraded credit ratings for six classes of the GSMS 2014-GC24 deal.
The February Morningstar report said the Stamford Plaza portfolio, which comprises 16.3 percent of the GSMS 2014-GC24 pool, had net cash flow for 2023 that was 58 percent below underwritten levels. Occupancy levels have hovered around 70 percent compared to 64.6 percent in late 2022, but that’s down from 88 percent at the loan’s issuance a decade ago, according to Morningstar.
A spokesman for RFR said in statement that the developer “remains committed to Stamford Plaza and looks forward to working with the special servicer.”
Andrew Coen can be reached at acoen@commercialobserver.com
