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CREFC Sees Uptick in CMBS Delinquencies, Special Servicing
Following three consecutive monthly declines, the CMBS delinquency rate increased four basis points in October to 2.96%, the CRE Finance Council said. October also saw a three-bp increase in CMBS loans in special servicing, marking the first time since June 2020 that the CMBS delinquency and special servicing rates rose in tandem.
“Despite falling for 25 of the past 28 months, we anticipate the delinquency rate will be more volatile given the challenging macro environment,” according to CREFC. “This reflects both heightened market volatility and a growingly unfavorable landscape for lenders in refinancing loans at higher rates and likely lower asset valuations as cap rates rise and the real potential that property-level cash flows decline.”
The special servicing rate remains well below its high of 10.48% in September 2020. Yet higher benchmark rates and the real risk of an economic slowdown suggest asset valuations may be declining, CREFC said.
- ◦Financing
