CMBS Delinquency Rate Declines Slightly in August

The volume of delinquency within the CMBS loan universe declined slightly in August, resulting in a small reduction in the overall delinquency rate, Trepp reported. Although this suggests that peak delinquencies may have already occurred, Trepp added, “as problem loans within the $604-billion-plus universe get worked out, they’re being replaced by new delinquencies.”

Just over $47.42 billion of loans are now more than 30 days late, compared to the peak of nearly $63 billion in April 2011. Delinquencies reached a low of $10 billion in early 2020, and then began increasing again in mid-2023 amid higher interest rates.

The current delinquency roll is dominated by loans against office buildings, which account for just more than 42% of the late-paying balance. While 467 office loans are more than 30 days late, the dollar balance is driven by a few very large loans, including the $85- million securitized portion of a $940 million senior loan against Manhattan’s Worldwide Plaza, which is now in the hands of a receiver.

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