In October 2024, the Trepp CMBS Delinquency Rate continued to rise, reaching 5.98%, an increase of 28 basis points from the previous month. This represents a year-over-year increase of 135 bps.
During this period, all major commercial property types except for office either saw a decrease or remained unchanged in their delinquency rates. Industrial maintained its September rate at 0.32%, while multifamily decreased by nine bps to reach a rate of3 .24%. Lodging also experienced a decline with delinquencies falling by14 bps to reach6 .09%. Retail saw the biggest improvement with delinquencies dropping by25 bps and reaching6 .82%.
However, office was the only sector that saw an increase in its delinquency rate during this time period. It rose from8 .36% in September to9 .37% and is significantly higher than it was one year ago at5 .75%. The last time office reached such high levels was back in2012-2013 when overall CMBS delinquencies hit an all-time high of10 ,34%in July2012.
According to Trepp’s data, more than60 %of newly defaulted loans were from the office sector alone during October.Mostly due to one large loan defaulting,this has hada significant impact on driving up overall CMBSdeliquencierates forthe month.The latest report highlights howoffice continues toposechallengesforCMBSinvestorsandlenders,and will require careful monitoring going forward.