National + Distressed Assets | July 31, 2023

CMBS Delinquencies Post Sharp Increase in July

After a slight improvement in June, the delinquency rate among Kroll Bond Rating Agency (KBRA)-rated U.S. CMBS rose sharply in July to 3.93%, a 34-basis point increase. The total delinquent and specially serviced loan rate in the $314.8-billion KBRA-rated CMBS universe continued trending upward for the fourth straight month to 6.44%, with a 37-bp month-over-month increase.

In July, CMBS loans totaling $2.6 billion were either transferred to special servicing or became newly delinquent. Slightly more than half that total was due to imminent or actual maturity default.

Office continues to have the highest exposure, accounting for 34.7% ($898.4 million) of the newly specially serviced and newly delinquent loans, KBRA said. Retail properties came in second at 26.4% ($683.4 million) and mixed-use came in third at 23.7% ($613.9 million).

That being said, the July delinquency rate for mixed-use properties was highest at 6.71%, followed by retail at a 5.48% delinquency rate and office at 3.79%. Mixed-use also posted the highest monthly increase in the delinquency rate.

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About Paul Bubny

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).

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