In April, the Trepp CMBS Delinquency Rate remained steady at 3.09%. However, the segment that is being closely monitored saw its rate rise again last month. Declines in retail, lodging and multifamily delinquencies offset a small increase in industrial loans and a bigger jump for office loans.
Office loan delinquencies rose 16 basis points to 2.77%, according to Trepp’s Manus Clancy who noted that “office remains the most heavily watched part of the market as firms look to aggressively reduce space” due to sublease space reaching or near record highs in many markets with demand from big tech firms eroding sharply; companies are also letting leases expire or renewing for smaller footprints which further contributes towards this trend.
Overall, while other segments have seen their rates decline over 12 months past year, office late-pays have increased by more than 100 bps during this period – making it an area of focus amongst industry professionals looking into CMBS investments and performance metrics alike.
