10 Commercial Assets at High Risk of Default

Correction: The original version of this article incorrectly included the image of Victoria Gardens in Rancho Cucamonga, Calif. next to a description of Masi Plaza, a different retail center. We apologize for the mistake.

The next few years are going to be big ones for CMBS loan maturities, and some properties are likely to have more trouble than others securing refinancing and/or staying afloat. To keep tabs on assets that may be facing a higher than usual risk of default, Morningstar Credit Ratings, a Nationally Recognized Statistical Ratings Organization (NRSRO), follows a special formula that takes into account the assets’ debt service coverage ratios, loan-to-value ratios, occupancy levels, maturity dates, tenant rollover expectations within a 12-month period and the overall leasing conditions in the assets’ metropolitan area. Here we present some commercial properties that look likely to experience troubles this year, based on those parameters.

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