DBRS Morningstar Releases Commentary: Extended Closures Come With Significant Challenges for Retail Loans in CMBS

DBRS, Inc. (DBRS Morningstar) released a commentary titled “Extended Closures Come With Significant Challenges for Retail Loans in CMBS.” The negative effects of the Coronavirus Disease (COVID-19) are beginning to manifest themselves in retail properties backing U.S. commercial mortgage-backed securities, particularly the single-asset/single-borrower deals. April remittance data show a spike in late payments and several large retail loans moving to the special servicer. The mandatory shutdown of nonessential businesses by local and state governments, coupled with tenants withholding April rent payments, has had an immediate material effect on the cash flows of retail properties. However, DBRS Morningstar believes there will be a longer-lasting impact on the sector after governments lift their restrictions.

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The commentary is available at www.dbrsmorningstar.com.

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