The U.S. commercial mortgage-backed securities (CMBS) delinquency rate jumped 51 basis points (bps) to 4.41% in July, according to new data from Trepp.
“While the rest of the U.S. economy has seen relief in terms of higher equity prices, better-than-expected corporate earnings, and falling inflation numbers, the commercial real estate (CRE) market continues to be left behind,” said Manus Clancy, senior managing director at Trepp, who added the new increase came with “four of the five major property segments posting sizable increases.”
July’s delinquency rate is the highest level since December 2021. The all-time high was 10.34% in July 2012, compared to the Covid-era high of 10.32% in June 2020.
Office delinquencies swelled by 46 bps upswing to a new delinquency rate of 4.96% – the sector has experienced a 350 bps rise since the end of 2022. The lodging delinquency rate jumped 50 bps to 5.85%, while the retail delinquency rate moved up 38 bps to 6.86% and the multifamily delinquency rate increased 24 bps to 1.83%. The only decline came in the industrial sector, where the delinquency rate slid by 11 bps to 0.31%
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