KBRA Releases Research – CMBS Loan Performance Trends: October 2024
29 Oct 2024 | New York
KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the October 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label commercial mortgage-backed securities (CMBS) in October increased to 5.48%, up 16 basis points (bps) from September. The total delinquent plus current but specially serviced loan rate (collectively, the distress rate) was relatively flat with an 11-bp increase to 8.63%. The increases were led by a 113-bp jump in the office delinquency rate pushing the overall distress rate in the sector to over 13%.
In October, CMBS loans totaling $2 billion were newly added to the distress rate, of which 44.3% ($902.4 million) were due to imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (53.3%, $1.1 billion), followed by retail (22.8%, $464.4 million) and then multifamily (9.6%, $194.7 million).
Key observations of the October 2024 performance data are as follows:
- The delinquency rate increased to 5.48% ($17.5 billion), compared to 5.32% ($16.7 billion) in September.
- The distress rate increased 11 bps to 8.63% ($27.6 billion), versus 8.52% ($26.8 billion) in September.
- The office distress rate reached 13%, with a jump of 85 bps. The increase was widespread with 20 office loans transferring to the special servicer this reporting period, including five that had balances at or above $100 million. These include Worldwide Plaza ($940 million in four conduits and one SASB (not KBRA-rated)), 805 Third Avenue ($275 million, three conduits and one LL), 3 Park Avenue ($182 million, four conduits), Park Square ($160 million, two conduits), and 141 Livingston ($100 million, three conduits).
- The mixed-use distress rate saw a big improvement with a drop of 237 bps to 11.91%, mainly due to the full payoff of two specially serviced loans. These include 731 Lexington Avenue ($490 million, DBCG 2017-BBG) and Greene Town Center ($113.6 million, two conduits), both of which the borrower paid off in full after maturity.
In this report, KBRA provides observations across our $333.2 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.