NEW YORK–The delinquency rate on commercial mortgage-backed securities (CMBS) was up just slightly in January, according to a new report that cautions there are areas of concern credit unions should be watching.
According to the analysis by Trepp, which provides information, analytics and other services to the structured finance, CRE and banking market, the overall CMBS Delinquency rate rose by 15 basis points in January 2024 to 4.66%.
“Delinquencies in the heavily-watched office sector experienced their most significant increase since September 2023,” the report states. “The office delinquency rate jumped 48 basis points to 6.30%.”
Report Highlights
Among the highlights in the latest report, according to Trepp:
- The multifamily segment notched a substantial decline, dropping 71 basis points for the month. The decline can be attributed to a large 2019 single-asset, single-borrower (SASB) apartment loan in San Francisco that was disposed in January.
- “If we included loans that are beyond their maturity date but current on interest, the delinquency rate would be 5.62%, up 13 basis points from December.”
- The percentage of loans in the 30 days delinquent bucket is 0.24%, up one basis point for the month.
The Overall Numbers
Trepp reported the overall numbers show:
- The overall US CMBS delinquency rate rose to 4.66%, an increase of 15 basis points for the month. (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 up 172 basis points.
- The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) is now 4.42%, up 14 basis points for the month.
- If defeased loans were taken out of the equation, the overall headline delinquency rate would be 4.88%, up 16 basis points from December.
- One year ago, the US CMBS delinquency rate was 2.94%.
- Six months ago, the US CMBS delinquency rate was 4.41%.
The CMBS 2.0+ Numbers
- The CMBS 2.0+ delinquency rate rose 19 basis points – to 4.50% – in January. The rate is up 178 basis points year- over-year.
- The percentage of CMBS 2.0+ loans that are seriously delinquent is now 4.26%, up 18 basis points for the month.
- If defeased loans were taken out of the equation, the overall CMBS 2.0+ delinquency rate would be 4.72% up 19 basis points for the month.
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