Trepp reported that the delinquency rate for multifamily commercial mortgage-backed security (CMBS) loans declined in January, falling 71 basis point. Trepp also reported that the multifamily CMBS special servicing rate declined, falling 83 basis points.
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 January 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 1.91 percent, down from 2.62 percent in December. The decline in the delinquency rate on loans on multifamily property was the largest of any of the property types Trepp covers. One year ago, the delinquency rate on CMBS loans for multifamily property was 1.56 percent.
Trepp found that the overall delinquency rate of CMBS loans in January was 4.66 percent. This is up 15 basis points from last month’s level of 4.51 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 4.88 percent from the 4.66 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.
Office and retail struggle
The other property types whose CMBS loan delinquencies were examined by Trepp were industrial, lodging, office and retail.
The CMBS delinquency rate for loans on industrial property fell to only 0.40 percent, down from 0.57 percent reported last month. Office CMBS delinquencies rose 48 basis points to 6.30 percent, the largest rise of any of the property types tracked. Delinquencies on CMBS loans for lodging properties rose to 5.46 percent from December’s level of 5.40 percent. Delinquencies on CMBS loans on retail properties remained elevated but fell slightly for the month, dropping to 6.27 percent from last month’s level of 6.47 percent.
CMBS special servicing rates move higher
Trepp also issued a report on special servicing rates in January for CMBS loans. Special servicing rates on CMBS loans on multifamily property declined significantly, falling to 2.34 percent from the 3.17 percent rate reported for December. The 83 basis point decline in this rate was by far the largest for any of the special servicing rate tracked by Trepp.
The report found that overall CMBS special servicing rate rose to 6.95 percent, up from 6.78 percent the month before. This is the highest overall special servicing rate reported since November 2021.
Special servicing rates on CMBS loans on industrial properties remain the lowest of any commercial property type but edged higher again this month, rising 4 basis points to 0.41 percent. Rates on lodging properties fell 21 basis points to 6.92 percent. Special servicing rates on office properties jumped 129 basis points to 9.74 percent while rates on retail properties were unchanged at 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.
