Retail, Office See Large Increases in CMBS Delinquencies

Four commercial property sectors saw monthly fluctuations in their CMBS delinquency rates of 40 basis points or more in December 2024, Trepp reported this week. Lodging delinquencies declined 78 bps to 6.14%, but the other three property types saw increases in December.

Retail delinquencies rose the most, climbing 86 bps to 7.43%. The office delinquency rate increased by 63 bps to an all-time high of 11.01%, while the multifamily rate grew by 40 bps to 4.58%. Industrial delinquencies dropped three bps to 0.29%.

The largest new retail delinquency in December was the $505-million loan on Natick Mall, a 1,039,965- square-foot superregional mall in the Boston suburb of Natick, MA. “Updated special servicer commentary highlights that the borrower believes the mall is not financeable at this time due to debt service and debt yield levels being below market, co-tenancy concerns and the status of the anchor boxes,” according to Trepp.

In office, the largest new delinquency was the $670-million 230 Park Ave. loan, backed by the Helmsley Building in Midtown Manhattan (pictured). Trepp noted that the loan had toggled between performing and nonperforming matured balloon throughout 2024 and was performing from July to November, but December commentary revealed that the special servicer commenced a foreclosure action.