National + Distressed Assets | April 23, 2022

CMBS ratings continued a trend toward stabilization in the first quarter of 2022

Fitch Sees CMBS Ratings Continuing to Stabilize

Fitch Ratings said its North America CMBS rating actions continue to stabilize in first-quarter 2022. Factors in the stabilizations included property cash flows recovering from their pandemic lows, higher recovery prospects on specially serviced loans with improved valuations, more loans being resolved and returning to the master servicer and better than expected recoveries on dispositions.

Ninety-six percent of rating actions in Q1 were affirmations, up from 91% in 2021 and 85% in 2020. Fitch has also revised classes to Rating Outlook Stable from Rating Outlook Negative; approximately 37% of affirmed classes had prior Negative Outlooks that were revised to Stable in Q1, up from just over 20% in second-half 2021.

Negative rating actions have dwindled, with fewer downgrades (2%; 64 classes) and Negative Watch rating signals (less than 1%; seven classes) in the quarter. Less than 0.1% of affirmed classes with prior Stable Outlooks had them revised to Negative.

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About Paul Bubny

Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).

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