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Fitch: Retail, Office Defaults Push CMBS Delinquencies Higher in May
Fitch Ratings said its overall U.S. CMBS delinquency rate increased nine basis points to 2.42% in May from 2.33% in April 2024 due to maturity defaults of several large regional mall and office loans. Led by the $255-million maturity default of a loan backed by a 980,711-square-foot portion of Providence Place Mall (pictured) in Providence, RI, the retail and office delinquency rates increased by 32 bps and 26 bps, respectively, last month.
New 60-day-plus delinquency volume totaled $1.32 billion in May compared with $1.49 billion in April, Fitch said. Office loans accounted for the largest share of new delinquencies (44%; $588 million), followed by retail (41%, $536 million) and hotel (11%, $139 million). Maturity defaults accounted for 77% ($1.02 billion) of new delinquencies, while term defaults represented 23% ($305 million).
Resolution volume increased to $771 million in May from $569 million in April, according to Fitch. May resolutions included $616 million of loans brought current, $24 million of loan liquidations and $131 million of loans previously 60+ days delinquent removed from Fitch’s index that are now 30 days delinquent.
Using a different yardstick from Fitch, Trepp reported that the CMBS delinquency declined by 10 bps to reach 4.97% as May ended. The improvement was driven by about $2 billion of office loan resolutions during the month. Year-over-year, though, delinquencies in May were higher compared to 3.23% in May 2023, according to Trepp data.
- ◦Financing
