Trepp reported that the delinquency rate for multifamily commercial mortgage-backed securities (CMBS) leaped higher in August, rising by the most for any of the property types Trepp tracks. The overall CMBS delinquency rate rose slightly, gaining 6 basis points.
Overall CBMS delinquency rate continues slow climb
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through August. 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 6.86 percent, up 71 basis points from last month’s reading. The multifamily CMBS delinquency rate has now risen for two months in a row after two months of declines. One year ago, the delinquency rate for CMBS loans for multifamily property was 3.30 percent. The rate has more than doubled in the last year while no other property type has seen its delinquency rate rise by more than 47 percent over that time.
Trepp found that the overall CMBS delinquency rate in August was 7.29 percent. The overall CMBS delinquency rate is up from its level of 5.44 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 be 9.31 percent. This rate is actually down 5 basis points for the month despite the rise in the overall delinquency rate. CMBS loans that are past their maturity date but still current on interest now represent 2.02 percent of loans outstanding.
The history of the overall and multifamily CMBS delinquency rates as reported by Trepp since January 2020 is illustrated in the chart, below. The chart also shows the linear-fit trend line for the multifamily CMBS delinquency rate since April 2024. The trend line indicates that the delinquency rate has been rising steeply, if not smoothly, since that date.
Office delinquencies also higher
The other property types whose CMBS delinquencies were examined by Trepp were industrial, lodging, office and retail.
The CBMS delinquency rate for office properties moved sharply higher this month, reaching a new all-time high of 11.66 percent. It is now up 369 basis points for the year, surpassing the rise of multifamily CMBS delinquencies.
The rate for lodging properties fell 5 basis points for the month, declining to 6.54 percent. The delinquency rate on CMBS loans on retail property loans also fell, declining 48 basis points to 6.42 percent. It is now at its lowest level since August 2024.
The CMBS delinquency rate for industrial property rose 8 basis points to 0.60 percent, matching its level of last March but below the levels it reached in June and July of 2024.
The full Trepp delinquency report can be found here.
