The delinquency rate for commercial mortgage-backed securities (CMBS) inched up in May by 5 basis points to 7.08%, according to new data from Trepp Inc.
The overall CMBS delinquent balance this month was $42.6 billion, up from $41.9 billion in April. If defeased loans were taken out of the equation, the overall headline delinquency rate would be 7.28%, up by 1 basis point from April. The delinquency rate is up 211 basis points from 4.97% in May 2024.
“After reaching a four-year high in April, the overall rate rose again, despite four of the five main property types sustaining decreases to their respective rates,” said Vivek Denkanikotte, Trepp research associate. “The lodging rate saw the largest decline, dropping 146 basis points to 6.39% after four consecutive monthly increases that pushed the rate to a three-year high of 7.85%. The multifamily rate pulled back 46 basis points to 6.11% but is still 441 basis points higher than it was one year ago.”
Denkanikotte added, “The two property types driving the overall increase were office and mixed-use. The office rate was up another 31 basis points to 10.59% in May. Although down from the all-time high of 11.01% reached last December, the office rate is still over 350 basis points higher than one year ago. On the other hand, nearly $2 billion worth of mixed-use loans became newly delinquent in May, lifted higher by a couple of big loans.”
Among other commercial property sectors, the industrial delinquency rate of 0.48% was down by 2 basis points and the retail delinquency rate of 6.64% was down by 14 basis points.
