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CMBS Delinquencies Rise in January, Driven by Office and Regional Malls
Fitch Ratings’ U.S. CMBS delinquency rate rose three basis points to 2.70% in January 2022 from 2.67% in December, driven by larger regional mall and office loans becoming delinquent for at least the second time. This was the first monthly rate increase since April 2021 and occurred even as late-pay rates for most property types ticked downward.
New 60-day delinquencies totaled $1 billion in January, up from $593 million in December. January’s 30-day delinquency volume fell sharply to $711 million from $2.7 billion in December and was lower than the average 30-day delinquencies of 2021 ($850 million).
The largest new delinquency was the $258-million 175 West Jackson loan, which became 60 days delinquent in January. Secured by a 1.5 million-square-foot office building in downtown Chicago, the loan returned to special servicing in November 2021.
The biggest monthly increases were for retail generally (64 bps to 7.56%) and large regional malls in particular (160 bps to 13.2%). Conversely, hotel saw a 63-bp decline in delinquencies to 8.8%.
Pictured: 175 W. Jackson in Chicago. Photo courtesy of Brookfield Properties.
