NEW YORK–The Trepp CMBS Delinquency Rate rose ever so slightly again in August 2024, increasing one basis point to 5.44%, according to its newest report.
“Unlike many months, the office sector was not responsible for the slight uptick in the overall rate,” Trepp said in releasing its analysis. “Although there was $1.25 billion worth of newly delinquent office loans, counteracting this was $1.55 billion worth of office loans that were delinquent a month prior, but were no longer delinquent in August (otherwise known as ‘cured’),” Trepp stated. “In August, the property type that contributed the largest net change in delinquent dollars was the multifamily sector, with a total of $407.77 million.”
The multifamily delinquency rate rose 67 basis points in August, reaching 3.30%, the Trepp data found.
Highest in 3 Years
“This is the highest the multifamily rate has climbed in more than three years,” Trepp said in releasing its newest analysis. “The last time the rate even eclipsed the 3.00% mark was in July 2021. For context, there was a large multifamily loan that accounted for north of 54% of the property type’s newly delinquent total. This was a portfolio loan that had previously been current on payments but now shows a delinquency status of non-performing matured balloon.”
Trepp said that if it included loans that are beyond their maturity date but current on interest, the delinquency rate would be 7.21%, up 43 basis points from July.
The percentage of loans in the 30 days delinquent bucket is 0.25%, unchanged for the months, Trepp stated, adding that its numbers assume defeased loans are still part of the denominator unless otherwise specified.
The Overall Numbers
According to Trepp:
- The overall US CMBS delinquency rate increased to 5.44%, an increase of one basis point for the month. (The all-time high on this basis was 10.34% registered in July 2012. The COVID-19 high was 10.32% in June 2020.)
- Year-over-year, the overall US CMBS delinquency rate is up 119 basis points.
- The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) is now 5.19%, up one basis point for the month.
- If defeased loans were taken out of the equation, the overall headline delinquency rate would be 5.67%, up four basis points from July, Trepp said.
- One year ago, the U.S. CMBS delinquency rate was 4.25%.
- Six months ago, the U.S. CMBS delinquency rate was 4.71%
The CMBS 2.0+ Numbers
The Trepp data also show:
- The CMBS 2.0+ delinquency rate rose three basis points – at 5.30% – in August. The rate is up 128 basis points year- over-year.
- The percentage of CMBS 2.0+ loans that are seriously delinquent is 5.05%, up three basis points from the prior month.
- If defeased loans were taken out of the equation, the overall CMBS 2.0+ delinquency rate would be 5.51%, unchanged for the month.
Overall Property Type Analysis (CMBS 1.0 and 2.0+)
- The industrial delinquency rate decreased 14 basis points to 0.50%.
- The lodging delinquency rate decreased 26 basis points to 5.91%.
- The multifamily delinquency rate increased 67 basis points to 3.30%.
- The office delinquency rate decreased 12 basis points to 7.97%.
- The retail delinquency rate increased 7 basis points to 6.21%.
Property Type Analysis CMBS 2.0+
- Industrial delinquency rate: 0.40% (down 14 basis points) • Lodging delinquency rate: 5.84% (down 26 basis points) • Multifamily delinquency rate: 3.30% (up 66 basis points) • Office delinquency rate: 7.88% (down 13 basis points)
- Retail delinquency rate: 5.65% (up 7 basis points)
The full report can be found here.