Trepp reported that delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans declined slightly in December, falling 7 basis points. Trepp also reported that the multifamily CMBS special servicing rate edged downward, falling 8 basis points.
Overall CBMS delinquency rate declines
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through December 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 2.62 percent in December, up from 2.46 percent in November and nearly unchanged from the 2.64 percent rate reported for October. One year ago, the delinquency rate on CMBS loans for multifamily property was 2.17 percent.
Trepp found that the overall delinquency rate of CMBS loans in December was 4.51 percent. This was down from last month’s level of 4.58 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 5.49 percent from the 4.51 percent reported above.
The history of the overall and multifamily CMBS delinquency rates as reported by Trepp since January 2020 is illustrated in the chart, below.
Different property type, different result
The other property types whose CMBS loan delinquencies were examined by Trepp were industrial, lodging, office and retail.
Industrial remains the star performer with a CMBS delinquency rate of only 0.57 percent. While this is much lower than the rates on other property types, it is up from the 0.38 percent reported last month. Office CMBS delinquencies fell slightly, dropping to 5.82 percent from the 6.08 percent level reported last month. Delinquencies on CMBS loans for lodging properties rose to 5.40 percent from November’s level of 5.21 percent. Delinquencies on CMBS loans on retail properties fell slightly, falling to 6.47 percent from last month’s level of 6.57 percent.
CMBS special servicing rates in gentle decline
Trepp also reported that special servicing rates on CMBS loans on multifamily property were marginally lower, falling to 3.17 percent in December from the 3.25 percent rate reported for November. While the multifamily rate trended higher through the middle of 2023, it has been nearly unchanged for the last 4 months.
The report found that the overall special servicing rate fell to 6.78 percent, down from 6.84 percent the month before. This rate has been generally flat since September.
Special servicing rates on CMBS loans on industrial properties remain the lowest of any commercial property type but rose 3 basis points in December to 0.37 percent. Rates on lodging properties were unchanged for the month at 7.13 percent. Special servicing rates on office properties fell 42 basis points to 8.45 percent while rates on retail properties fell 46 basis points to 9.37 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. The full Trepp special servicing rate report can be found here.
