CMBS Delinquency Rate Hits New Post-COVID Peak

WRE News November 1, 2023

Buyer

CMBS Delinquency Rate Hits New Post-COVID Peak

The commercial mortgage-backed securities (CMBS) delinquency rate rose 24 basis points in October to 4.63%, according to new data from Trepp Inc. The represents the highest level since the end of the Covid-19 pandemic.

Trepp primarily attributed this spike to a $930 million industrial loan that showed up as past its balloon date and was not current on interest payments.

“The loan originated in 2021 and backs a single-borrower CMBS deal,” said the Trepp report on the delinquency rate. “The loan had a maturity date of October 2023 with embedded extension options that could push the maturity to 2026. Of the original 109 properties backing the loan, 32 have already been released.”

As a result of that single loan, the industrial delinquency rate jumped 226 basis points to 2.56%. The other commercial property sector where the delinquency rate increased were the office market, where the rate climbed 17 basis points to 5.75%, and the multifamily market, with a 79 basis points upswing to 2.64%.

Elsewhere in the industry, the lodging delinquency rate fell 51 basis points to 4.76% and the retail delinquency rate dropped 37 basis points to 6.55%.


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