Multifamily CMBS delinquency rate edges higher in May

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CMBS delinquency and CMBS special servicing

Trepp reported that delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans rose slightly in May, climbing 10 basis points.

Overall CBMS delinquency rate also down slightly

For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through May 2024. 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 1.70 percent, up from 1.33 percent in April but down from 1.84 percent in March. One year ago, the delinquency rate on CMBS loans for multifamily property was 1.46 percent.

Trepp found that the overall delinquency rate of CMBS loans in May was 4.97 percent. This is down 10 basis points from last month’s level of 5.07 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 6.00 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 delinquency rates

Mixed results for other property types

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 rose to 0.50 percent, up from 0.44 percent reported last month. Office CMBS delinquencies fell 44 basis points to 6.94 percent. Delinquencies on CMBS loans for lodging properties rose 25 basis points to 6.22 percent. Delinquencies on CMBS loans on retail properties were unchanged at 5.94 percent.

The full Trepp delinquency report can be found here.

Multifamily CMBS special servicing rates jump higher

Trepp’s most recent report on special servicing rates CMBS loans is for the month of April. In April, special servicing rates on CMBS loans on multifamily property leapt to a multiyear high, more than doubling from 2.4 percent to 5.1 percent.

A major reason for the climb is the $1.2 billion loan on the Parcmerced apartments in San Francisco going to special servicing. It represented 75 percent of the $1.6 billion in multifamily loans that transferred to special servicing during the month.

The report found that overall CMBS special servicing rate rose to 8.11 percent, up from 7.31 percent the month before. This is the highest overall special servicing rate reported since July 2021.

The special servicing rate on CMBS loans on industrial properties continues to be the lowest of any commercial property type covered. It remains at 0.41 percent, the same reading as for the last 3 months. Special servicing rates on lodging properties rose 4 basis points to 7.40 percent. Special servicing rates on office properties climbed 34 basis points to 10.64 percent while rates on retail properties were 106 basis points higher at 10.85 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.

CMBS special servicing rates

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