Trepp reported that both delinquency rates and special servicing rates for multifamily CMBS loans declined slightly in May. Delinquency rates and special servicing rates for the overall CMBS market rose driven by problems with loans on office properties.
Overall CBMS delinquency rate rises
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through May 2023. While it only looks at CMBS loans, it breaks out results by the type of property covered by the loans.
Trepp found that the overall delinquency rate of CMBS loans in May was 3.62 percent. This is up from last month’s level of 3.09 percent. Improvement in multifamily loan delinquency rates were more than offset by rises in delinquency rates for office and, to a lesser extent, retail properties.
The delinquency rate on loans on multifamily property was 1.46 percent, down from 1.83 percent in April and from the 1.91 percent rate reported for March. One year ago, the delinquency rate on CMBS loans for multifamily property was 1.02 percent.
The other property types whose CMBS loan delinquencies were examined were industrial, lodging, office and retail. Delinquency rates for industrial and lodging were both effectively unchanged for the month. However, rates for retail rose slightly while rates for office rose significantly.
Lodging CMBS delinquencies edged upward from 4.23 percent to 4.25 percent while industrial CMBS delinquencies edged downward from 0.40 percent to 0.39 percent. CMBS loans on retail properties again had the highest delinquency rate in May at 6.67 percent, up from the 6.11 percent rate reported for April. Delinquencies on CMBS loans for office properties made the biggest move, jumping to 4.02 percent from April’s level of 2.77 percent.
The history of the overall and multifamily CMBS delinquency rates as reported by Trepp since January 2020 is illustrated in the chart, below.
CMBS special servicing rates edge higher
Trepp also issued a report on special servicing rates in May for CMBS loans. It found that overall special servicing rates rose to 6.11 percent, up from 5.62 percent the month before.
Special servicing rates on CMBS loans on multifamily property continued their recent slow decline, falling to 2.97 percent in May from the 3.01 percent rate reported for April. However, one year ago, this rate was 1.29 percent.
Special servicing rates on CMBS loans on industrial properties were unchanged from last month at 0.39 percent while rates on lodging properties fell 8 basis points to 6.39 percent. Special servicing rates on retail properties rose 12 basis points to 11.01 percent while rates on office properties soared 104 basis points to 6.43 percent.
The history of the overall and multifamily CMBS special servicing rates as reported by Trepp since January 2020 is illustrated in the chart, below.
The full Trepp delinquency report can be found here while the Trepp report on special servicing rates can be found here.
