Trepp reported that the delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans surged higher in March, more than reversing last month’s decline. The overall CMBS delinquency rate also rose, gaining 35 basis points.
Overall CBMS delinquency rate resumes climb
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through March. While it only looks at CMBS loans, it breaks out results by the type of property covered by the loans.
The delinquency rate for CMBS loans on multifamily property was 5.44 percent, up 98 basis points from last month’s reading. One year ago, the delinquency rate for CMBS loans for multifamily property was 1.84 percent. This month’s rise was the largest since July 2021, when the multifamily delinquency rate jumped 250 basis points. Trepp reported that this month’s multifamily delinquency rate was the highest recorded in nearly 10 years.
Trepp found that the overall CMBS delinquency rate in March was 6.65 percent. The 35 basis point rise in this rate exceeds the combined declines from the 2 previous months. The overall delinquency rate is up from its level of 4.67 percent one year ago.
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 8.37 percent from the level reported above.
The history of the overall and multifamily delinquency rates as reported by Trepp since January 2020 is illustrated in the chart, below.
Lodging delinquency rate also jumps higher
The other property types whose CMBS loan delinquencies were examined by Trepp were industrial, lodging, office and retail.
Along with the rise in the multifamily CMBS delinquency rate, a significant move higher in the rate for lodging also pushed the overall delinquency rate up. The lodging delinquency rate rose by 76 basis points in the month, reaching 7.19 percent.
The delinquency rates on CMBS loans on retail property rose 33 basis points to 7.82 percent while the delinquency rate for industrial property rose 28 basis points to 0.60 percent. The delinquency rates on office property was the only one to fall in March, declining 2 basis points to 9.76 percent.
The full Trepp delinquency report can be found here.
