In November, Kroll Bond Rating Agency reported that the distress rate for CMBS loans increased by $2.1 billion. Office properties accounted for 74.6% of these newly distressed loans, with a 116-basis point rise in delinquencies to 8.84%. However, retail and lodging delinquencies continued to improve.
According to KBRA’s report this week, most of the office special servicing transfers were not due to imminent or actual maturity default like in previous months but rather term defaults where borrowers sought relief well before maturity dates.
Out of the 26 newly distressed office loans this month, more than half (57.7%) have maturity dates over a year away according to KBRA’s findings. These transfers include notable properties such as Manhattan’s 230 Park Ave ($670 million), and mixed-use buildings like Lexington Ave ($123 million) which have significant office components as part of their collateral.
Overall, there was a climb in both delinquent rates (19 bps) and specially serviced loan rates (35 bps) from October’s numbers according to KBRA who rated US CMBS at an overall rate of 4/4% compared with last month’s rate at just above four percent.
Pictured: The iconic building located at40 Wall St is one example included among these recent transfers.
