Downturn in commercial, multifamily delinquencies continues

Which property types continue to see the greatest stress?

Downturn in commercial, multifamily delinquencies continues

Commercial and multifamily mortgage delinquencies continued to ease in September, the Mortgage Bankers Association reported Wednesday.

The balance of mortgages backed by commercial and multifamily properties that were current dropped one basis point from August to 3.3% in September, according to MBA’s CREF Loan Performance Survey.

“Commercial and multifamily mortgage performance has improved considerably since the worst of the downturn,” said Jamie Woodwell, MBA’s vice president of commercial real estate research.

Delinquency rates among property types were as follows:

  • 14% of lodging loan balances were delinquent, up from 13.4% in August
  • 8.2% of retail loan balances were delinquent, down from 8.5% in August
  • 1.8% of industrial property loan balances were delinquent, up from 1.5% in August
  • 1.8% of office loan balances were delinquent, down from 2% in August
  • 1.3% of multifamily loan balances were delinquent, up from 1.2% in August

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Delinquency rates among capital sources were as follows:

  • 7.2% of the balance of CMBS loans was delinquent in September, up from 6.9% in August
  • 2% of FHA multifamily and health care loan balances were delinquent, unchanged from the previous month
  • 1.2% of life company loan balances were delinquent, down from 1.9% in August
  • 0.6% of GSE loan balances were delinquent, unchanged from August

“The stress that entered – and remains – in the market is largely concentrated in lodging and retail properties, but with fewer new loans becoming delinquent, and shrinking balances of overall delinquency as lenders and servicers work out the longer-term troubled loans,” Woodwell said. 

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