NEW YORK– The delinquency rate on commercial mortgage-backed securities moved up slightly in December, rising above 3% for the first time since July 2022, according to the Trepp CMBS Delinquency Rate.
“After reaching a post-COVID-19 trough of 2.92% in September 2022, the rate has inched up for three consecutive months,” Trepp said in releasing the report. “A consensus has formed in the CMBS market with many analysts and investors anticipating higher delinquency rates in 2023. The biggest impact could come from loans slated to mature in 2023. With interest rates considerably higher than a year ago and with uncertainty for the US economy in 2023, many maturing loans could face challenges getting refinanced.
“That is particularly true in the office segment where the future of office demand remains unclear,” Trepp added.
The Trepp CMBS Delinquency Rate in December was 3.04%, an increase of five basis points from November. The percentage of loans in the 30 days delinquent bucket is 0.16% – up three basis points for the month, according to the company, which notes its numbers reflect percentages that assume defeased loans are still part of the denominator.
The Overall Numbers
According to the Trepp data:
- The overall US CMBS delinquency rate inched up five basis points in December to 3.04%. (The all-time high on this basis was 10.34% registered in July 2012. The COVID-19 high was 10.32% in June 2020.)
- Year over year, the overall US CMBS delinquency rate is down 153 basis points.
- The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or non- performing balloons.
- If defeased loans were taken out of the equation, the overall 30-day delinquency rate would be 3.21%, up four basis points from November.
- One year ago, the US CMBS delinquency rate was 4.57%.
- Six months ago, the US CMBS delinquency rate was 3.20%.
The CMBS 2.0+ Numbers
According to Trepp:
- The CMBS 2.0+ delinquency rate moved up eight basis points to 2.81% in December. The rate is down 134 basis points year-over-year.
- The percentage of CMBS 2.0+ loans that are seriously delinquent is now 2.65%, up five basis points for the month.
- If defeased loans were taken out of the equation, the overall CMBS 2.0+ delinquency rate would be 2.95%, up seven basis points for the month.
Overall Property Type Analysis (CMBS 1.0 and 2.0+)
The Trepp report also shows:
- The industrial delinquency rate inched up one basis point to 0.42%.
- The lodging delinquency rate dropped 24 basis points to 4.40%.
- The multifamily delinquency rate jumped 36 basis points to 2.17%.
- The office delinquency rate dipped 12 basis points to 1.58%. The retail delinquency rate climbed 34 basis points to 6.97%.
Property Type Analysis CMBS 2.0+
Finally, the report also shows:
- Industrial delinquency rate: 0.25% (up one basis point month over month)
- Lodging delinquency rate: 4.29% (down 25 basis points)
- Multifamily delinquency rate: 2.17% (up 36 basis points)
- Office delinquency rate: 1.34% (down six basis points)
- Retail delinquency rate: 6.28% (up 43 basis points)
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