In January, the delinquency rate for CMBS in the U.S. saw a significant increase of almost 10%, reaching 4.61%, according to a report by Kroll Bond Rating Agency (KBRA). The overall distress rate, which measures distressed loans across KBRA’s $317.3 billion rated CMBS universe, also rose more than 11% to reach 7.39%.
During this reporting period, newly added distressed loans totaled $3.4 billion and over half of these (53.7%) were due to imminent or actual maturity default situations.
The office sector had the largest portion (74/7%) of newly distressed loans at $2/5 billion with its distress rate increasing by 233 basis points from December’s level of8/55%. This was largely driven by two properties:280 Park Ave in Manhattan and One Market Plaza in San Francisco.
Mixed-use properties accounted for11/3% ($3852 million)of new distress while retail made up another11 /1 % ($3764 million). In contrast,multifamily experienced a decline month-over-month with its distress rate decreasingby59 bps.
This decrease was mainly due tothe liquidationofthe Veritas multifamily portfolio securing GSMS2021-RENT.This resultedin areported43% loss on thesecuritized balance.However,the reported loss includesa substantial reserve holdback that could potentially reverse much of it if released,says KBRA.
Pictured:280 Park Ave.
CMBS Delinquencies See Significant Increase in January
