In 2010 and 2011 there was over $84 Billion of defaulted CMBS loans resolved by the special servicers. There are significant trends with those resolutions that are worth sharing. The least surprising of these trends is that LNR, as one of the third largest special servicers, prefers Note Auctions versus other special servicers. LNR was responsible for 45% of all note sales done during those years. Here’s a quick recap of how the top 3 Special Servicers resolved their defaulted loans during those two years (using slight rounding of the percentages):
LNR:
35% Note Auction
29% Modified
19% Foreclosed
17% Paid-off
CW Capital:
42% Modified
27% Foreclosed
19% Note Auction
12% Paid-off
C-III
51% Modified
22% Note Auction
15% Foreclosed
12% Paid-off
Your Special Servicer Matters!
