Tensions in the multifamily residential market across the US Sun Belt have now reached one of the world's largest private asset managers. A CMBS loan originally amounting to 1.3 billion dollars, issued by Blackstone in autumn 2021, has moved into special servicing following the passing of its maturity date in October 2026. This is according to a report from rating agency Morningstar Credit. The outstanding loan balance currently stands at 517.7 million dollars.
The loan, designated as BX 2021-21M Mortgage Trust, was secured by 21 residential complexes comprising a total of 6,671 units when finalised. The properties were located across states including Texas, Florida, Georgia, Washington, Colorado, South Carolina and Kansas. Many property owners who took out loans in the Sun Belt prior to central bank interest rate rises now face considerable refinancing challenges.
Reduced remaining portfolio and three-month payment deferral
In recent years, the portfolio has been scaled down successively. As industry outlet The Real Deal reported, the loan's remaining collateral portfolio currently comprises six residential complexes with 1,842 units. These include two properties in Seattle as well as assets in San Antonio, Jonesboro in the state of Georgia, and Bradenton in Florida.
According to Morningstar, the borrower was granted a three-month payment deferral to allow for the orderly sale of the loan's remaining assets. David Putro, Associate Managing Director at Morningstar, stated with reference to comments from the special servicer that the remaining properties in the portfolio are currently generating slightly more cash flow than was calculated in the original underwriting.
Background to the financing structure
The securitisation transaction was jointly structured and issued in 2021 by Barclays and Morgan Stanley. At the time, the financing was arranged as a floating-rate, senior mortgage loan on an interest-only basis.
Blackstone had acquired the underlying holdings between April and September 2021 in several off-market, all-cash transactions, as Fitch Ratings analysed at the time. Blackstone did not initially respond to an enquiry regarding the current developments.
