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.