2023 Multifamily CMBS Delinquency Rates

Source: Trepp

The Trepp CMBS Delinquency Rate held steady, but the segment that everyone continues to watch closely saw its rate move higher again in April 2023.

The Trepp CMBS Delinquency Rate was unchanged in April at 3.09 percent. Declines in the retail rate, lodging, and multifamily offset a small increase in industrial loans and a bigger increase for offices.

Office remains the most heavily watched part of the market as firms look aggressively to reduce space. Sublease space is at or near record highs in many markets as demand from big tech firms has eroded sharply. In addition, many companies are letting leases expire or are renewing for smaller footprints.

Last month, the Trepp CMBS Office Delinquency Rate rose another 16 basis points and is now up almost 1 percent over the last three months.

The percentage of loans in the 30 days delinquent bucket is 0.20 percent – down four basis points for the month.

Our numbers above reflect percentages that assume defeased loans are still part of the denominator.

—Posted on May 31, 2023

Source: Trepp

The Trepp CMBS Delinquency Rate fell slightly, but the segment that everyone continues to watch closely saw its rate move higher again in March.

The Trepp CMBS Delinquency Rate fell three basis points in March to 3.09 percent. A big decline in the retail rate, along with small improvements in industrial and hotel, helped the overall number. However, the office market – for which sentiment has turned sharply negative over the last few months – saw a sizable uptick last month. Concerns over the office segment were already high before 2023 over higher interest rates, looming maturity, falling values, and uncertainty about demand post-COVID.

The tone has gotten decidedly worse over the last three months as some big office loans (held by big property owners) have defaulted and/or been sent to special servicing.

In addition, a tightening of credit conditions in CMBS and with bank lending has made capital even more scarce. As noted, the Trepp CMBS Delinquency Rate fell three basis points in March to 3.09 percent.

The percentage of loans in the 30 days delinquent bucket is 0.24 percent – unchanged for the month. Our numbers above reflect percentages that assume defeased loans are still part of the denominator.

—Posted on Apr. 28, 2023

Source: Trepp

Even though expectations since June had been that commercial mortgage-backed securities (CMBS) delinquencies were poised to move higher, the reality was that until January, CMBS delinquencies only increased modestly from what was seen over the previous seven months.

That changed in February 2023, as the CMBS delinquency rate moved sharply higher. The Trepp CMBS Delinquency Rate moved up 18 basis points in February to 3.12 percent. That follows the January reading which was the second lowest since the onset of the COVID-19 pandemic.

The February jump of 18 basis points was the second largest increase since June 2020 when COVID-19 sent delinquency rates skyrocketing. Only December 2021 (up 19 basis points) saw a larger increase over the last 30 months.

The percentage of loans in the 30 days delinquent bucket is 0.24 percent, up 12 basis points for the month. Our numbers above reflect percentages that assume defeased loans are still part of the denominator.

—Posted on Mar. 29, 2023

Source: Trepp

The narrative in the commercial mortgage-backed securities (CMBS) market since last summer has been that CMBS loans will not be easy to refinance in the current higher-interest-rate environment and that delinquencies will have nowhere to go but up. However, for the last several months, the delinquency rate has seen only de minimis increases and now, January 2023 data shows the rate decreased. For now, the data stands in contrast to the concerns put forth by many in the CMBS market over the last six months.
The Trepp CMBS Delinquency Rate fell 10 basis points in January to 2.94 percent. That is the second-lowest reading since the onset of the COVID-19 pandemic. Only the September 2022 reading of 2.92 percent was lower.

The percentage of loans in the 30 days delinquent bucket is 0.12 percent, down four basis points for the month.

Our numbers above reflect percentages that assume defeased loans are still part of the denominator.

—Posted on Feb. 28, 2023