CRED iQ's Overall CRE Delinquency Rate Declines this Month, While Office Defaults Tick Up

The CRE Data, Analytics, and Valuation Platform tracks loan and property-level data across the full universe of securitized debt.

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CRED iQ

Jan 04, 2022, 15:38 ET

RADNOR, Pa., Jan. 4, 2022 /PRNewswire/ -- The CRED iQ's delinquency rate had a modest decline this month, which marks its 18th consecutive improvement. The delinquency rate, equal to the percentage of all delinquent specially serviced loans and delinquent non-specially serviced loans, for CRED iQ's sample universe of $500+ billion in CMBS conduit and single-asset single-borrower (SASB) loans was 4.59%. Additionally, CRED iQ's special servicing rate, equal to the percentage of CMBS loans that are with the special servicer (delinquent and non-delinquent), declined to 7.06%, after a brief increase in the prior month. The special servicing rate has declined 11 out of the 12 previous months.

CRED iQ's Delinquency & Special Servicing Trend

Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 7.18% of CMBS loans that are specially serviced, delinquent, or a combination of both. The overall distressed rate declined compared to the prior month given both declines in the delinquency and special servicing rates.

By property type, the delinquency rate for office increased to 2.74%, compared to 2.18% in the prior month. The increase in office delinquency was carried by two loans secured by Chicago office buildings — 181 West Madison and 135 South LaSalle. The $100 million 135 South LaSalle loan defaulted after the collateral property's largest tenant, Bank of America, vacated at lease expiration. The $240 million 181 West Madison loan became delinquent following the bankruptcy filing of the loan sponsor, HNA Group.

Lodging continues to have the highest delinquency (9.71%) and special servicing (14.16%) rates among property types, followed by retail delinquency (7.52%) and special servicing (12.23%) rates. Both lodging and retail exhibited improvements compared to the prior month, which is a trend that has been consistent over the past year as those loans continue to be worked out and resolved.

CRED iQ's overall distressed rate (DQ + SS%) by property type increased for office and self-storage increased, while lodging, retail, multifamily, and industrial declined.

About CRED iQ

CRED iQ is a commercial real estate data, analytics, and valuation platform providing actionable intelligence to CRE and capital markets investors. Subscribers to CRED iQ use the platform to identify valuable leads for leasing, lending, distressed debt, and acquisition opportunities. Our data platform is powered by over $2.0 trillion of CMBS, CRE CLO, and GSE loan and property data.

SOURCE CRED iQ