CRE Loan Delinquencies Reach Lowest Levels of Pandemic
Delinquency rates for mortgages backed by commercial and multifamily properties continue to decline, according to two reports by the Mortgage Bankers Association (MBA).
MBA’s Commercial Real Estate Finance Loan Performance Survey for May found delinquencies at their lowest levels of the pandemic, while the first-quarter Commercial/Multifamily Delinquency Report similarly charted broad-based declines.
“Pockets of elevated stress remain in loans backed by lodging and retail properties, driven by loans in the later stages of delinquency and foreclosure or REO,” said Jamie Woodwell, MBA’s VP of commercial real estate research. “Quarterly measures of delinquency rates between last year’s Q4 and this year’s Q1 show a drop in distress across nearly every capital source.”
Hotel loan delinquencies ended May at 20.0%, down two percentage points from April. Retail delinquencies rose two percentage points to 9.5%. The concentration of hotel and retail loans means CMBS delinquency rates are higher than other capital sources.