Banks’ overall commercial real estate delinquency rate increased in the first quarter, albeit slightly, Trepp reported, citing the results of Trepp’s Anonymized Loan-Level Repository (T-ALLR) data set. The two-basis point increase from 0.87% to 0.89% was “noticeable after the previous pattern of steady improvement” over the preceding four quarters, according to Trepp.
The office sector was the main contributor to the overall increase, with delinquencies in this sector rising 50 bps to 1.8% in Q1. In contrast to the broader CRE market, though, delinquencies for office have been rising for the past several quarters.
“Concerns about the office property type have continued to increase, with banks’ risk ratings on office loans in large urban markets going up,” wrote Trepp’s Matthew Anderson.
The highest delinquency rates are in the lodging and retail property types, although the delinquency rate for retail has been improving since Q4 2020 and the lodging delinquency rate declined in Q4 2021, according to Trepp. These were the two sectors within commercial real estate that were hardest hit by the pandemic.
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 15-20 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces.
Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications.
Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).