KBRA Releases Research - CMBS Loan Performance Trends: April 2024
26 Apr 2024 | New York
KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the April 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in April increased moderately to 4.67%, up 17 basis points (bps) from March. However, the total delinquent and specially serviced loan rate (distress rate) markedly increased 79 bps to 8.29%. The jump in distress rate was largely driven by the multifamily sector, which saw two loans totaling over $1.5 billion transferring to the special servicer this reporting period, although retail (79 bps) and mixed-use (76 bps) also experienced some large increases.
CMBS loans totaling $3.3 billion contributed to the increase in the distress rate this reporting period, with 35.8% ($1.2 billion) stemming from imminent or actual maturity default. As noted, the multifamily sector represented the largest portion (44.3%, $1.5 billion) of newly distressed loans. The office sector, which remains steady since 2023, came in second, accounting for 26.8% ($886.1 million) of newly distressed loans, followed by retail at 19.2% ($634.7 million).
Other key observations of the March 2024 performance data are as follows:
- The delinquency rate increased 17 bps to 4.67% ($13.9 billion), compared to 4.5% ($13.4 billion) in March.
- The distress rate increased 79 bps to 8.29%, compared to 7.5% in March.
- Multifamily continued its climb in distress rate, with a sharp increase of 429 bps. This is largely due to the transfers of Parkmerced ($1.3 billion in MRCD 2019-PARK and conduit transactions) and Hatteras Multifamily Portfolio ($346 million in NCMF 2022-MFP), both of which are discussed further below.
- The retail sector saw the second-largest increase in distress rate, with two notable retail properties being transferred to the special servicer due to maturity defaults after having been previously modified and extended, including Yorktown Center, a super regional mall outside Chicago, Illinois ($120.5 million in CG-CCRE 2014-FL1, large loan (LL)) and Providence Place Mall, an anchored retail center in Providence, Rhode Island ($254.9 million in DBUBS 2011-LC3, LL).
- Mixed-use and office also continue to see their distress rate climb, which for this month includes four newly specially serviced or delinquent loans ranging in balance from $130 million to $250 million with component pieces spread across numerous conduits. These include two New York City office loans, 25 Broadway ($250 million) and 225 & 233 Park Avenue South ($235 million); one Seattle office portfolio, Selig Portfolio ($239.8 million); and another in Santa Clara, California, Nvidia Santa Clara ($130 million).
In this report, KBRA provides observations across our $315.9 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and LL transactions.
Click here to view the report.
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