Trepp reported that the delinquency rate for multifamily commercial mortgage-backed securities (CMBS) loans decreased in May after two months of sharp gains. However, the overall CMBS delinquency rate rose slightly, gaining 5 basis points despite most property types seeing their delinquency rates fall for the month.
Overall CBMS delinquency rate remains above 7 percent
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through May. 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 6.11 percent, down 46 basis points from last month’s reading. One year ago, the delinquency rate for CMBS loans for multifamily property was 1.70 percent. It has generally been rising since then, although with occasional pauses. It remains to be seen if May’s pullback is another such pause or the start of a downward trend.
Trepp found that the overall CMBS delinquency rate in May was 7.08 percent. The overall delinquency rate is up from its level of 4.97 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 8.64 percent, up from 8.37 percent last month.
The history of the overall and multifamily CMBS delinquency rates as reported by Trepp since January 2020 is illustrated in the chart, below.
Office rates continue higher
The other property types whose CMBS delinquencies were examined by Trepp were industrial, lodging, office and retail.
The delinquency rates for office properties moved higher by another 30 basis points this month. It is up 82 basis points over the last 2 months but is still 43 basis points below its recent high in December 2024. Despite office being the only property type whose delinquency rate rose for the month, it was able to pull the overall delinquency rate higher.
The rate for lodging properties tumbled 146 basis points to 6.39 percent, reversing the gains of the last 2 months. The delinquency rate on CMBS loans on retail property loans dropped 23 basis points to 7.89 percent. It is down 93 basis points in the last 2 months. The delinquency rate for industrial property fell 2 basis points to 0.48 percent.
The full Trepp delinquency report can be found here.
