There is a credit problem in CMBX which has led to a significant widening of spreads in that sector.Spreads are wider by 6 basis points to 8 basis points in AAA space and about 35 basis points wider in AA space.It gets very ugly in A and BBB space as that stuff is out 75 basis points.
The loan in question is a $225 million dollar loan on which the borrower walked away with a $44.6 million cash take out.
The building in question is rent stabilized and the premise of the loan was that a very large portion of tenants would shift to market rates. That has not happened and the loan is on the verge of default.
Here is a link to a WSJ article about the story.