According to CRED iQ, the multifamily sector has seen a significant increase in distress rates for apartment loans with CMBS financing. Year to date, there has been a 185% rise in distress rates, bringing the current rate to 7.4%. This puts apartments in competition with lodging for third place.
The retail and office sectors are currently leading with the highest distress rates at 11.7% and 11.5%, respectively. However, both saw only a slight increase of four basis points from the previous month.
Hotels hold third place with an 8.1% distress rate but have shown improvement over the past month with a decrease of 130 basis points.
Industrial and self-storage remain steady at sub-1% levels for most of this year except one outlier month.
Overall, CRED iQ’s latest report shows that June had another record high for overall distress rates at an average of 8.62%. The special servicing rate remained consistent at around eight percent while delinquency rates increased by almost half a percentage point to reach six percent.
