The $28.5 million Riverside Center loan (JPMDB 2016-C4) transferred to special servicing after failing to pay off at maturity in October 2026. The collateral is a 272,596 sf, three building office complex in La Crosse, Wisconsin. The single tenant, United Healthcare Services, Inc., formerly occupied 100% of all three buildings but vacated one building, 332 Front Street (34% of GLA), following the July 2025 lease expiration. The tenant's remaining lease (66%) expires in July 2028. The borrower is currently marketing the three buildings for sale at a combined asking price of $36 million ($132/sf). KCP identified the loan as a K-LOC in September 2023 due to tenant rollover concerns.

In securitized markets, year-to-date (YTD) private label commercial mortgage-backed securities (CMBS) issuance through October 16 reached $108.1 billion, ahead of the $99.7 billion recorded over the same period last year. Commercial real estate (CRE) collateralized loan obligation (CLO) issuance also remains active, reaching $38 billion YTD, up from $23.1 billion over the same period in 2025.

During the October 2026 remittance, the $450 million Hyatt Regency Waikiki Beach Resort & Spa (HONO 2021-LULU) transferred to special servicing after failing to payoff at its October 2026 fully extended maturity. Updated special servicer commentary indicated that the borrower had not provided a viable exit strategy, despite earlier reports that it was negotiating a potential $680 million sale of the 1,230-key beachfront resort in Honolulu, Hawaii. Net cash flow is strained, with the annualized June 2026 figure declining to $5.8 million (0.28 DSCR), compared with $16.7 million (0.77 DSCR) at year-end 2025 and $36.7 million at issuance. Further complicating resolution, the property sustained more than $6.0 million in storm-related damage in March 2026.

The $205.4 million 2400 Market loan (COMM 2021-2400) transferred to special servicing ahead of its December 2026 maturity. The loan is secured by a 592,476 sf class A office and retail property in Philadelphia, Pennsylvania. According to servicer commentary, the borrower engaged CBRE to market the property for sale and requested a 150-day extension through May 8, 2027, as it does not anticipate completing the sale in time to repay the loan at maturity. The borrower has exhausted its three contractual extension options, and the current workout strategy is loan modification. The transfer follows a recently reported JPMorgan Chase sublease at the property, as detailed in our October 15 Credit Alert.

The $517.7 million Blackjack Portfolio loan (BX 2021-21M) transferred to special servicing in October, with special servicer commentary indicating that a three-month forbearance agreement was finalized to provide additional time to complete pending asset sales. The loan reached its October 2026 maturity and was reported as matured performing. The remaining collateral consists of six multifamily properties totaling 1,842 units following the release of Lakeside Villas, which resulted in a $51.6 million principal curtailment this month. At issuance, the portfolio comprised 21 multifamily properties totaling 6,671 units.

During the October 2026 remittance period, the workout strategy for the $120 million 111 Livingston Street loan (CD 2017-CD3, CGCMT 2017-P7, CD 2017-CD4) shifted to a discounted payoff (DPO). The loan is secured by a 434,000 sf office building in Brooklyn, New York, and transferred to special servicing in July 2026 due to imminent default. Financials for the year ended December 2025 reflected NCF of $2.3 million (0.39 DSCR), while approximately 129,000 sf (30% of GLA) was being marketed for lease as of October 2026. The loan is scheduled to mature in January 2027.

The $745.7 million Project Prime loan (THPT 2023-THL) transferred to special servicing during the October 2026 remittance period due to imminent monetary default. The loan is secured by a portfolio of 72 hotels (7,008 keys) across 19 states, down from 84 hotels (7,993 keys) at issuance following the release of 12 properties. The loan is scheduled to mature in December 2026 and was structured with no extension options.

The 261-key Ritz-Carlton Half Moon Bay, collateral for the $1.58 billion Strategic Hotel Portfolio loan (SHR 2024-LXRY), is being sold to Regency Half Moon Bay LLC for an undisclosed price. The Half Moon Bay City Council recently approved an estoppel certificate related to the pending sale. Separately, the hotel paid approximately $2.2 million in delinquent taxes and interest to the city. The development comes shortly after the 750-key Fairmont Scottsdale Princess changed hands, which KCP previously highlighted in a September 28 credit alert. Both properties were among six collateral hotels marketed for sale earlier this year through Eastdil Secured. If both properties are released from the collateral, the portfolio would decline from nine hotels totaling 4,957 keys to seven totaling 3,946 keys.

The KBRA Loan of Concern (K-LOC) Index was 27.29% in August 2026, up from 27.24% in July 2026. We identified 70 loans ($1.40 billion) as new K-LOCs in our conduit CMBS coverage universe in August. Conversely, we removed the K-LOC designation from 82 loans ($1.32 billion), including 11 ($177.3 million) that were liquidated in August. The K-LOC Index for August 2026 is a composite of 3,126 K-LOCs with an aggregate unpaid principal balance (UPB) of $81.40 billion across 544 conduit transactions.

The Tysons Corner Center property was sold and released from the $271.1 million HBS Portfolio loan (HBCT 2015-HB10, HBCT 2015-HB7). The sale generated approximately $35.0 million in gross proceeds, of which $33.3 million was applied as a principal curtailment to the HB10 component. The remaining collateral consists of 20 retail properties, including 13 former Lord & Taylor locations and seven Saks Fifth Avenue stores. The transaction follows the release of four properties that generated approximately $74.6 million in net proceeds, as highlighted in a July 14 Credit Alert, and represents further progress in the special servicer’s orderly liquidation of the remaining collateral.