KBRA Releases Research - CMBS Loan Performance Trends: March 2024
28 Mar 2024 | New York
KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the March 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in March remained steady at 4.5%, up 2 basis points (bps) from February. The total delinquent and specially serviced loan rate (distress rate) also remained steady at 7.5% compared to 7.47% last month. The minor increase in distress rate was led by multifamily with a month-over-month (MoM) increase of 27 bps, followed closely by office (26 bps) and lodging (19 bps).
CMBS loans totaling $1.1 billion contributed to the distress rate this reporting period, and 39.8% ($419 million) stemmed from imminent or actual maturity default. The office sector, as it has done each month over the past year, represented the largest portion (57.9%, $609.1 million) of newly distressed loans. The retail sector came in second, accounting for 14.6% ($153.4 million) of newly distressed loans, followed by mixed-use at 10.8% ($113.5 million).
Other key observations of the March 2024 performance data are as follows:
- The delinquency rate increased 2 bps to 4.5% ($13.4 billion), compared to 4.48% ($13.3 billion) in February.
- The distress rate, which increased 3 bps, was led by multifamily (up 27 bps to 3%), although the sector is below its peak of 4.02% at year-end 2023.
- Office continued its upward climb reaching 11.26% with a MoM increase of 26 bps as three loans each in excess of $100 million in unpaid principal balance were sent to special servicing.
- The retail sector saw a sizable drop in the distress rate mainly due to the Woodbridge Center loan ($250 million original balance in WFRBS 2014-C20 and WFCM 2014-LC16), which was disposed of through a receiver sale resulting in a 62.3% loss on the loan.
In this report, KBRA provides observations across our $314.5 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.
Click here to view the report.
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