Trepp reported that the delinquency rate for multifamily commercial mortgage-backed securities (CMBS) retreated in September after last month’s surge. The overall CMBS delinquency rate also fell. Its 6 basis point decline reversed last month’s gain.
Overall CBMS delinquency rate edges lower
For delinquencies, Trepp focuses on loans that are 30 or more days delinquent. The current CMBS delinquency report provides data through September. 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 6.59 percent, down 27 basis points from last month’s reading. After a recent runup, the multifamily CMBS delinquency rate is now at nearly the same level as it was last April.
One year ago, the delinquency rate for CMBS loans on multifamily property was 3.33 percent. The 326 basis point rise in the rate over the past year is the largest for any of the property types tracked by Trepp.
Trepp found that the overall CMBS delinquency rate in September was 7.23 percent. The overall CMBS delinquency rate is up from its level of 5.70 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 9.48 percent, up 17 basis points for the month. CMBS loans that are past their maturity date but still current on interest now represent 2.25 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.
Lodging delinquencies jump
The other property types whose CMBS delinquencies were examined by Trepp were industrial, lodging, office and retail. Only the rate for retail increased this month.
The rate for lodging properties took the greatest fall for the month, dropping 73 basis points to 5.81 percent. It is down 42 basis points year-over-year.
The CBMS delinquency rate for office properties retreated from last month’s high. It fell 53 basis points to 11.13 percent. It is still up 277 basis points for the year.
The CMBS delinquency rate for industrial property fell 4 basis points to 0.56 percent. One year ago, it was 24 basis points lower at 0.32 percent.
The delinquency rate on CMBS loans on retail property loans rose 34 basis points to 6.76 percent. In September 2024, it was 7.07 percent.
The full Trepp delinquency report can be found here.
