Trepp reported that delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans rose sharply again in December. The overall CMBS delinquency rate also rose, climbing another 17 basis points.
Overall CBMS delinquency rate higher again
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through December. While it only looks at CMBS loans, it breaks out results by the type of property covered by the loans.
The delinquency rate for loans on multifamily property was 4.58 percent, up 40 basis points from last month’s reading. While this month’s increase is large, it is less than half of last month’s 94 basis point jump. One year ago, the delinquency rate for CMBS loans on multifamily property was 2.62 percent.
Trepp found that the overall delinquency rate of CMBS loans in December was 6.57 percent. This is up from last month’s level of 6.40 percent. It is also up from its year-ago 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 8.58 percent from the level 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 up but lodging down
The other property types whose CMBS loan delinquencies were examined by Trepp were industrial, lodging, office and retail.
The rise in the overall commercial property CMBS delinquency rate was driven by increases in the delinquency rates for loans on retail, lodging and multifamily properties. The delinquency rates for loans on industrial and lodging property types were down for the month.
The delinquency rates on CMBS loans on retail properties saw the largest increase in this month after falling last month. The rate rose 86 basis points to reach 7.43 percent. The delinquency rate on lodging properties saw the second largest increase, jumping 63 basis points to 11.01 percent. This is the highest rate for office property delinquencies that Trepp has seen in the 24 years it has been tracking it.
The delinquency rate for industrial property was down slightly this month, falling 3 basis points to 0.29 percent. The delinquency rate on lodging properties nearly reversed last month’s surge, falling 78 basis points to 6.14 percent.
The full Trepp delinquency report can be found here.
