CMBS delinquency rate sustains monthly slump

Data shows delinquencies remain low for majority of property types

CMBS delinquency rate sustains monthly slump

The delinquency rate for commercial mortgage-backed securities (CMBS) continued its downward trend in June, down to 3.30% from 3.32% the previous month.

Commercial real estate data provider CRED iQ reported that overall delinquency has consistently dropped every month since June 2020.

By property types, delinquency rates for loans secured by office properties edged up from 1.60% to 1.72% month over month. Meanwhile, the retail, lodging and self-storage sectors posted declines in CMBS delinquencies. But despite the monthly drop, retail remained the property type with the highest delinquency rate.

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“Retail continued to have the highest delinquency rate (6.01%) by property type for the third consecutive month after eclipsing the lodging sector in April 2022,” CRED iQ explained. “New high-profile retail delinquencies this month included an $85.2 million loan secured by the Crossroads Center regional mall in Saint Cloud, MN. The loan became 30 days delinquent in June 2022 but has been in special servicing since October 2020.”

Special servicing rate, including delinquent and non-delinquent loans, was down to 4.64% in June from 5.17% in May.

“The lodging sector, which had a special servicing rate of 7.72%, exhibited the greatest month-over-month improvement among all property types. The retail sector had the highest special servicing rate (9.43%), weighted by relatively large mortgages secured by regional malls,” CRED iQ said in a statement. “In one of this month’s latest developments, the $210 million Eastview Mall and Commons loan transferred to special servicing on June 1, 2022. The borrower cited ongoing issues related to the pandemic; however, the loan also has an impending September 2022 maturity date in an unfavorable refinancing environment.”

Overall, the distressed rate of CMBS loans that are specially serviced, delinquent, or a combination of both, hovered at 4.95% in June. Distressed rates for all property types declined, except for office and industrial.