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CMBS Delinquencies Rise Nearly 10% in January

The delinquency rate among U.S. CMBS climbed meaningfully in January from December, rising almost 10% to 4.61%, Kroll Bond Rating Agency (KBRA) reported. The total delinquent and specially serviced loan rate—i.e. the distress rate as measured by KBRA across its $317.3-billion rated universe of CMBS–also jumped more than 11% to 7.39%.  

 CMBS loans totaling $3.4 billion were newly added to the distress rate this reporting period, and more than half (53.7%, $1.8 billion) stemmed from imminent or actual maturity default. The office sector represented the largest portion (74.7%, $2.5 billion) of newly distressed loans, with the sector’s distress rate climbing 233 basis points to 10.8% from 8.55% in December, driven largely by 280 Park Ave. in Manhattan and One Market Plaza in San Francisco.  

The mixed-use sector came in second, accounting for 11.3% ($385.2 million) of newly distressed loans, followed by retail at 11.1% ($376.4 million). Conversely, multifamily experienced a month-over-month decline of 59 bps in its distress rate.  

The decrease was primarily driven by the liquidation of the Veritas multifamily portfolio securing GSMS 2021-RENT, which resulted in a reported 43% loss on the original securitized balance. However, the loss includes a substantial reserve holdback that could reverse much of the losses if released, according to KBRA. 

Pictured: 280 Park Ave.

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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 16-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 7-10 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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