CRED iQ's Overall CMBS Delinquency Rate Posts Modest Decline in June

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Jul 06, 2022, 13:27 ET

CRED iQ's Overall Delinquency Rate Declined from 3.32% to 3.30% in June 2022

RADNOR, Pa., July 6, 2022 /PRNewswire/ -- The CRED iQ delinquency rate for CMBS declined modestly during the June 2022 remittance period. Overall delinquency has declined consecutively in each month since June 2020. The delinquency rate, equal to the percentage of all delinquent specially serviced loans and delinquent non-specially serviced loans was 3.30%, which compares to the prior month's rate of 3.32%.

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By property type, the delinquency rate increased in June for the office and industrial sectors. The delinquency rate for loans secured by office properties was 1.72% as of June 2022, which was an increase compared to 1.60% in the previous month.

Delinquency rates declined for the retail, lodging and self-storage sectors. 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. 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.

CRED iQ's special servicing rate (includes delinquent and non-delinquent loans) declined month-over month to 4.64% from 5.17%. 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. 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.

Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 4.95% of CMBS loans that are specially serviced, delinquent, or a combination of both. Distressed rates for all property types declined, except for office and industrial.

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