Delinquencies Tick Upward for Fitch-Rated CMBS Loans, Led by Office and Mixed-Use
Fitch Ratings’ U.S. CMBS delinquency rate increased three basis points to 1.85% in January 2023 from 1.82% in December 2022. Contributing to the second-consecutive month’s increase were new office and mixed-use delinquencies, alongside a continuing high volume of retail delinquencies, which include several larger, previously cured loans returning to the index.
New 60-day-plus delinquency volume of $948 million in January remained elevated, higher than the $911 million reported in December. Two-thirds of January’s new delinquencies (68%; $646 million) were maturity defaults; the majority were retail ($370 million) and office ($224 million) loans. In addition, 30-day delinquencies in January increased to $764 million from $642 million in December.
Resolution volume grew to $775 million in January from $514 million in December. The bulk of resolutions were retail loans (70%; $546 million). January resolutions included $427 million of loans brought current, $228 million of loans previously 60 days-plus delinquent removed from Fitch’s index that are now 30 days delinquent and $119 million of liquidations.
Approximately 3.0% of the Fitch-rated U.S. CMBS universe ($16.3 billion) was in special servicing as of the January remittance, in line with December.
Office, mixed-use and multifamily reported higher rates, while retail and hotel reported lower rates. Within the multifamily universe is student housing, which saw a 36-bp increase to 1.66%. CMBS backed by self-storage properties registered a vanishingly low delinquency rate of 0.02%, unchanged from December.
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).