KBRA Releases Research – CMBS Loan Performance Trends: August 2024
27 Aug 2024 | New York
KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the August 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in August declined marginally to 4.98%, down 11 basis points (bps) from July, while the total delinquent and specially serviced loan rate (distress rate) increased 32 bps to 8.36%.
In August, CMBS loans totaling $1.7 billion were newly added to the distress rate, of which 64.6% ($1.1 billion) was due to imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (54.5%, $928.8 million), followed by multifamily at 29.4% ($500.7 million) and retail at 11.9% ($203 million).
Other key observations of the August 2024 performance data are as follows:
- The delinquency rate declined marginally to 4.98% ($15.5 billion), compared to 5.09% ($15.8 billion) in July.
- The distress rate increased 32 bps to 8.36% ($26.1 billion), versus 8.04% ($25 billion) in July.
- The office distress rate closed in on the 12% mark with a jump of 89 bps. This came as multiple loans became newly distressed this month, the largest of which included two office properties with the same sponsor, RFR Holding LLC:; Stamford Plaza Portfolio ($247.4 million in three conduits) and 17 State Street ($180 million in two conduits). Both loans became non-performing matured balloons after failing to pay off at maturity this month.
- Multifamily experienced the largest distress rate increase (100 bps) after dropping 110 bps last month. The increase included the addition of 20 Broad Street ($220 million in Hamlet 2020-CRE1) as a newly specially serviced loan, as well as six loans totaling $141.8 million that were delinquent in June 2024 and, brought current in July, but which subsequently transferred to the special servicer.
- Mixed-use experienced the largest improvement in its distress rate (-92 bps). The decline included the transfer back to the master servicer of the City Square and Clay Street loan ($90 million in two conduits), which is secured by a mixed-use (office and retail) property in Oakland, California.
In this report, KBRA provides observations across our $327.2 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.