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Trepp flags $1.11 billion of SASB interest shortfalls in 77 deals

Six deals hold $516 million of the total, and five have unpaid interest on Class A bonds.

$1.11BCumulative interest shortfalls across 77 SASB deals

At a glance

  1. In five of the six, the shortfall has reached the Class A bonds.
  2. For advisors and allocators buying SASB bonds or pricing private debt against a property already in a SASB trust, the shortfalls move risk up the capital stack.
  3. Appraisals did most of the damage.

Cumulative interest shortfalls on 77 single-asset, single-borrower CMBS deals totaled $1.11 billion in October 2026, according to Trepp's screen of that month's remittance data published Oct. 30.

Six of the 77 deals account for $516 million of the total, or 46%. In five of the six, the shortfall has reached the Class A bonds. Across all 77, 24 have missing interest at the senior class. In the sixth, CXP 2022-CXP1, a 2024 modification cut the rate on the trust's notes to 0.019%. The shortfall reached Class E, the most senior class that deal issued.

For advisors and allocators buying SASB bonds or pricing private debt against a property already in a SASB trust, the shortfalls move risk up the capital stack. They come from appraisal reductions and servicing costs shrinking interest to the trust, not from missed loan payments, so a loan coded current does not mean the senior bond is being paid. HILT 2016-SFP makes the point: the Hilton San Francisco loan is coded current, its net cash flow is negative, and the Class A bonds are $16.6 million short.

Appraisals did most of the damage. Four of the six deals sit at loan-to-value ratios above 350%; each appraisal reduction cuts the interest advanced to the trust. At SRPT 2014-STAR the appraisal reduction now equals the entire $607 million loan, and appraisal subordinate entitlement reductions have drained $188 million over the years.

Cash flow offers no exit. Net cash flow debt yields across the six run from negative 4.7% to 4.5%. The two Portland hotels behind MSC 2019-PLND produce a 1.1% debt yield against a 7.0% loan coupon, which leaves no conventional payoff.

All six have been in special servicing for more than three years; SRPT 2014-STAR has been there since 2019. Destiny USA, one of the six, had loans mature in 2022 and forbearance lapse in 2024. Shortfalls now sit on its Class A bonds and both interest-only strips.

The 77 deals are 89% of the 87 SASB deals Trepp screened with at least half their balance in special servicing. As Private Wealth Daily previously reported, Trepp has also flagged $802 million of Chicago office CMBS lease rollover ahead of maturity.

The dollar figures are accruals, not write-downs. Trepp defines a shortfall as cumulative interest owed to bondholders but not yet paid, which keeps building until a loan is resolved.

Reported by the Real estate debt desk from Trepp. Published . Corrections

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