Lenders on commercial real estate have been inundated with forbearance requests. What they are willing to grant varies greatly by property type and borrower quality.

Lenders and CMBS special servicers are still scrambling to work through the growing backlog of forbearance and relief requests. Borrowers looking for clues on just how far lenders are willing to bend—and what comes after initial relief expires—are finding that there is no cookie cutter approach.

Across the board, debt providers are dealing with relief requests with data showing clear hot spots in hotel and retail CMBS loans. “What we are hearing is that servicers are working with borrowers amidst an initial tsunami of requests for various forms of relief and a continued steady stream of requests as the pandemic continues,” says Lisa Pendergast, executive director of the CRE Finance Council (CREFC). CREFC has been in constant contact with its servicing community and also published a Guide to the CMBS Marketplace and CMBS Loan COVID-19 Relief, which provides advice to CMBS borrowers.

According to Fitch Ratings, more than 5,000 CMBS borrowers representing in excess of $100 billion in CMBS loans had reached out to servicers with relief requests as of mid-April. Subsequently, $20 billion in CMBS loans were transferred to special servicers in March, April and May—more than double the volume of specially serviced loans at the end of 2019. Hotels and retail combined represent about 80 percent of the CMBS volume that has moved to special servicing. In addition, Fitch Ratings expects CMBS delinquencies to rise materially higher in July with a significant number of additional transfers to special servicers as loans pass the 60-day delinquent mark. As of May 30, Fitch Ratings was tracking 142 loans valued at a combined $8.2 billion that were between 30 days and 59 days delinquent.