Loans

Over the past two years, quarterly earnings results that followed holiday shopping seasons have come with a side of fresh store closures as well as new bankruptcy filings by major retailers. In the first few weeks of 2017 alone, long-established chains such as RadioShack, JCPenney, Macy’s, CVS, and Gordmans announced plans to shutter hundreds of underperforming store locations from their portfolios, putting added pressure on numerous commercial real estate landlords and mall center operators. The trend reflects the ongoing effort of retailers to reduce costs and focus on new showrooming and omnichannel strategies that better cater to the purchasing tendencies of today’s consumers, a sizable portion of which includes millennials. The confluence of e-commerce, changing consumer shopping habits, and new technological enhancements has shifted the retail landscape away from traditional uses of large physical footprints and the one-dimensional approach to sales as discount, experiential, and specialty retailers continue to rise in popularity. Historical Performance The national delinquency rate (categorized as 30 or more days past due, in foreclosure, REO, or non-performing balloons) for loans securitized into private-label CMBS deals has been steadily increasing during the “wall of maturities” period, as the large wave of more than $300 billion in legacy …