CMBS delinquencies fall as large loan cures

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cmbs delinquencies

Trepp reported that delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans declined slightly in November, falling 18 basis point. The delinquency rate for the overall market also fell as a large industrial loan cured that had gone delinquent the month before.

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

Trepp report on CMBS delinquencies on multifamily loans and commercial property loans

Overall CBMS delinquency rate declines

For CMBS delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current delinquency report provides data through November 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 2.46 percent, down from 2.64 percent in October. One year ago, the delinquency rate on CMBS loans for multifamily property was 1.81 percent.

Trepp found that the overall delinquency rate of CMBS loans in November was 4.58 percent. This is down from last month’s level of 4.63 percent.

Last month, a single large industrial loan missed a balloon payment, causing it to become delinquent. This one loan caused the industrial sector delinquency rate to rise by 2.17 percentage points. The curing of this loan caused the industrial sector delinquency rate to fall back to 0.38 percent. This was down sharply from last month’s rate but up from the 0.30 percent delinquency rate reported two months ago.

Trepp 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 these loans were included, the overall delinquency rate on CMBS loans would rise to 5.58 percent from the 4.58 percent reported above.

Different property type, different result

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

The office CMBS delinquency rate continued its steady rise, breaking through the 6 percent level. It is now 6.08 percent, up from 5.75 percent last month and 5.58 percent the month before. Delinquencies on loans for lodging properties rebounded to 5.21 percent from October’s level of 4.76 percent. Delinquencies on loans on retail properties were nearly unchanged, rising to 6.57 percent from last month’s level of 6.55 percent.

The full Trepp report can be found here.