Press Release|CMBS

KBRA Releases Research – CMBS Loan Performance Trends: July 2024

30 Jul 2024 | New York

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the July 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. CMBS in July remained steady at 5.09%, up 2 basis points (bps) from June, while the total delinquent and specially serviced loan rate (distress rate) decreased 41 bps to 8.04%. A meaningful part of the drop in the distress rate is attributable to two loans totaling $1.4 billion that were returned to the master servicer following modification.

In July, CMBS loans totaling $1.3 billion were newly added to the distress rate, 62.9% ($809 million) of which was due to imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (64.4%, $828.2 million), followed by retail at 10% ($129.1 million), and then lodging at 9% ($115.4 million).

Other key observations of the July 2024 performance data are as follows:

The delinquency rate remained steady at 5.09% ($15.8 billion), compared to 5.07% ($15.5 billion) in June.
The distress rate moved down by 41 bps to 8.04% ($25 billion), compared to 8.45% ($25.8 billion) in June.
Mixed-use experienced the largest improvement in its distress rate (136 bps). The decline was driven by the transfer back to the master servicer of the Columbus Square Portfolio loan ($367.2 million), which is secured by a mixed-use portfolio located in New York City. The loan, which is participated across four conduits, was modified and had its maturity extended.
The office distress rate also experienced a meaningful 46-bp drop but remains over 11% as 280 Park Avenue ($1.1 billion in PRK 2017-280P), which was modified and extended, was returned to the master servicer. However, this was offset by the ongoing maturity-related office special servicing transfers, which include the Bank of America Plaza ($400 million in four conduits) and 200 Fifth Avenue ($200 million in two conduits).
Multifamily also saw a drop in its distress rate by 110 bps to 6.5%, as $152.3 million of loans became current after reporting 30+ days delinquent last month for the first time. However, a meaningful part of the rate decrease can be attributed to the 10% growth in KBRA’s rated multifamily universe, which includes two SASBs totaling $3.5 billion.

In this report, KBRA provides observations across our $326.3 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.

KBRA Releases Research – CMBS Loan Performance Trends: July 2024

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