The 14,701-sf 3 East 48th Street property (21% of GLA) was sold in March 2026 by LNR Partners on behalf of the trust to Ilan Bracha and IB Global for a rumored $9.5 million ($646/sf). The building was the smaller of two properties that comprised the $105.0 million 597 Fifth Avenue (COMM 2014-UBS4); the other, a 71,243-sf mixed-use property was not expected to be sold as part of the transaction. The servicer deemed the former loan to be non-recoverable in February 2024, and the collateral portfolio went REO in June 2025. Occupancy for the portfolio was 17% as of December 2025. An appraisal dated the same month valued the portfolio at $63.2 million ($790/sf) and a $60.8 million ARA was assigned in March 2026.

During the February 2026 remittance period, 13 assets within the KCP coverage universe were resolved with a loss greater than 2% of the unpaid principal balance (UPB). The assets had an aggregate principal balance of $369.4 million and served as collateral in 13 CMBS transactions. Total realized losses of $317.1 million in February represented a 60% decrease from January 2026 and were 48% above the trailing 12- month (TTM) average.

Interest rates increased sharply in March, largely driven by higher inflation expectations tied to the recent surge in oil prices amid supply disruptions in the Middle East. Markets are now pricing in a 3.7% probability of a rate hike by December 2026, with the most likely outcome remaining no change (75.4%).

In securitized markets, private label commercial mortgage-backed securities (CMBS) issuance slowed to $26.7 billion year-to-date (YTD) through March 13, down from $32.8 billion over the same period in 2025. In contrast, commercial real estate collateralized loan obligations (CRE CLO) issuance is running ahead of last year at $13 billion YTD, up from $7.4 billion.

In March 2026, 86 non-defeased loans ($1.34 billion) matured, of which 53.05% (26 loans; $712.8 million) by unpaid principal balance (UPB) defaulted at maturity. The default rate for loans collateralized by office was 83.88%, followed by multifamily (67.18%), retail (41.42%), and lodging (39.34%).

The year-to-date (YTD) multifamily default rate is 19%, which is comparatively lower than the March 2026 multifamily default rate of 67.18%. The higher default rate was partly driven by a limited volume of multifamily loan maturities, which amplified the impact of the $44.1 million The Frontier loan’s failure to pay off at maturity. A total 67.9% of office loans have defaulted at maturity YTD, followed by retail (57.9%) and lodging (36.6%).

Capital Group has agreed to acquire Bank of America Plaza (WFRBS 2014-C22, WFRBS 2014-C23, CGCMT 2014-GC25, GSMS 2014-GC26) for approximately $210 million ($150/sf), 65% below the $605 million appraised value at issuance. The 1.4 million sf office tower, located in Downtown Los Angeles, secures a $400 million loan, which was transferred to special servicing in July 2024 ahead of its September 2024 maturity default. Foreclosure was filed in April 2025 and a receiver was appointed in May 2025. Occupancy has fallen to 67% as of November 2025, down from 86% in December 2023.

The $86.3 million Signature Office Portfolio loan (GSMS 2020-GSA2, MSC 2021-L5) was identified as a K-LOC after falling 30 days delinquent in MSC 2021-L5, though it continues to be reported as current in GSMS 2020-GSA2. Allstate (19% of GLA) elected not to renew ahead of its October 2026 lease expiration, and KCP research indicates that approximately 22% of the portfolio was being marketed for lease. The collateral is a 409,901-sf, two-property suburban office portfolio in Hauppauge, NY, and Cranford, NJ.

The $280.8 million Penn Square Mall loan (MSC 2016-PSQ, MSBAM 2016-C28, MSBAM 2016-C29) was modified according to March reporting. The loan has been extended through January 2028 and includes a one-year extension option. As part of the modification, the borrower contributed $30 million of new equity. The extension option is subject to a 10.5% debt yield requirement, and an additional $15 million principal curtailment. The loan transferred to the special servicer in December 2025 ahead of its January 2026 maturity. The loan is secured by a 777,281-sf portion of an enclosed two-story, 1.1 million-sf super-regional mall in Oklahoma City, OK.

Willowbrook Mall (BPR 2021-WILL) and Altamonte Mall (MSC 2013-ALTM) are expected to be refinanced through a $250 million CMBS transaction (GGP 2026-2PAK). The collateral includes a 540,000-sf portion of the 1.5 million-sf Willowbrook Mall in Houston, TX, and a 652,000-sf portion of the 1.2 million-sf Altamonte Mall in Altamonte Springs, FL. Loan proceeds, together with $26 million in new equity from Brookfield and New York Common Fund, are expected to retire approximately $267.6 million of existing debt and pay closing costs.

Grocery Outlet announced in early March plans to close 36 underperforming stores, representing 6% of its store base, as part of an optimization and restructuring effort. KCP reviewed its CMBS coverage and identified 25 properties securing 16 loans—$471.1 million by allocated loan amount—across 24 transactions with exposure to Grocery Outlet tenancies. KCP subscribers can access the full list here. Of the identified CMBS exposure, stores at two properties are slated for closure.

Barings has agreed to sell the collateral securing the $590 million JW Marriott Marco Island Beach Resort loan (JW 2024-MRCO) to Sculptor Diversified REIT, Inc. for $835 million. The collateral includes the 809 key, full-service luxury resort on beachfront property in Marco Island, FL, as well as the two 18-hole golf courses. Sculptor stated the transaction is expected to close on or before May 1, 2026, subject to customary conditions, and that it plans to renovate the property’s amenities and guest rooms, with most of the capital expected to be deployed by the second year of ownership.