Multifamily CMBS delinquencies rise again in July

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Trepp reported that the delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans moved higher in July. The delinquency rate for the overall CMBS market also rose, with only industrial properties seeing delinquency rates fall.

The history of the overall and multifamily CMBS delinquency rates as reported by Trepp since January 2020 is illustrated in the chart, below.

multifamily CMBS delinquency rates

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 July 2023. While it only looks at CMBS loans, it breaks out results by the type of property covered by the loans.

The delinquency rate on loans on multifamily property was 1.83 percent, up from 1.59 percent in June. One year ago, the delinquency rate on CMBS loans for multifamily property was 0.94 percent, so the delinquency rate has nearly doubled over the last 12 months.

Trepp found that the overall delinquency rate of CMBS loans in July was 4.41 percent. This is up from last month’s level of 3.90 percent.

The report noted that loans that are past their maturity date but are still current on their interest payments are not counted as being delinquent. However, if they were included, the overall delinquency rate on CMBS loans would rise to 4.77 percent from the 4.41 percent reported above.

Your property type may vary

The other property types whose CMBS loan delinquencies were examined by Trepp were industrial, lodging, office and retail.

Lodging CMBS delinquencies had the largest percentage increase in the month, rising from 5.35 percent to 5.85 percent. The rise in delinquencies on CMBS loans for office properties was a bit less than that of lodging, climbing to 4.96 percent from June’s level of 4.50 percent. Delinquencies on CMBS loans on retail properties rose to 6.86 percent from last month’s level of 6.48 percent. Industrial CMBS delinquencies fell from 0.42 percent to 0.31 percent.

CMBS special servicing rates also rise

Trepp also issued a report on special servicing rates in July for CMBS loans. It found that overall special servicing rates rose to 6.62 percent, up from 6.42 percent the month before. This rate has been generally trending upward for the past year.

Special servicing rates on CMBS loans on multifamily property were marginally lower, falling to 3.26 percent in July from the 3.28 percent rate reported for June. This rate has also been trending higher for the last year but less smoothly than for the overall rate. It has now been higher than the highest level reached during the pandemic for 5 months in a row.

Special servicing rates on CMBS loans on industrial properties remain the lowest of any commercial property type, falling slightly to 0.31 percent. Rates on lodging properties rose 66 basis points to 7.06 percent. Special servicing rates on office properties rose 9 basis points to 7.33 percent while rates on retail properties fell 19 basis points to 10.87 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.

multifamily cmbs special servicing rates

The full Trepp delinquency report can be found here. The full Trepp special servicing rate report can be found here.