CRED iQ's Overall CMBS Delinquency Rate Rises Higher in August

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Aug 31, 2022, 11:08 ET

CRED iQ's Overall Delinquency Rate Increased from 2.93% to 3.21% in August 2022

RADNOR, Pa., Aug. 31, 2022 /PRNewswire/ -- The CRED iQ delinquency rate for CMBS rose higher during the August 2022 remittance period. This was the first month-over-month increase in over two years. The delinquency rate, equal to the percentage of all delinquent specially serviced loans and delinquent non-specially serviced loans was 3.21%, which compares to the prior month's rate of 2.93%.

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By property type, the delinquency rate modestly increased across several sectors. The multifamily delinquency rate, equal to 1.90%, exhibited the most notable month-over-month increase. Higher multifamily delinquency was attributed to a maturity default of a $481 million mortgage, secured by 43 multifamily properties located across the Midwest and Southwest.

Retail has the highest delinquency rate (5.91%) by property type, marking the fourth consecutive month since it surpassed the lodging delinquency rate, which was equal to 5.63% as of August 2022. The sharp increase in the multifamily delinquency rate this month was enough to push it higher than the office delinquency rate of 1.52%. Industrial (0.29%) and self-storage (0.02%) delinquency rates were relatively unchanged compared to the prior month.

CRED iQ's special servicing rate (includes delinquent and non-delinquent loans) increased month-over month to 4.91% from 4.47%. The retail sector exhibited the highest month-over-month increase among special servicing rates by property type, primarily due to the transfers of several high-profile regional malls. The retail special servicing rate increased to 10.11%, compared to 8.9% from the prior month. Among notable regional malls securing loans that transferred to special servicing this month was Santa Monica Place in California, which secures a $285 million mortgage.

Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 5.10% of CMBS loans that are specially serviced, delinquent, or a combination of both. This month, the overall distressed rate for CMBS increased in tandem with increases in delinquency and special servicing rates.

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SOURCE CRED iQ