CMBS Delinquencies Inch Upward in June; Office Sector Hits Record High
The Trepp Commercial Mortgage-Backed Securities (CMBS) Delinquency Rate increased slightly in June 2024, rising five basis points to 7.13%.
Although the overall delinquent balance fell marginally to $42.3 billion from $42.6 billion in May, the total outstanding balance also decreased—from $601.6 billion to $593.4 billion—contributing to the uptick in the delinquency rate.
After a broad-based improvement in May, June saw a reversal, with four out of the five main property types experiencing higher delinquency rates. The only exception was the multifamily sector, which improved slightly with a 20-basis-point decline.
The most notable increase occurred in the office sector, which climbed 49 basis points to 11.08%—a new record high. This surpassed the previous peaks of 11.01% in December 2023 and 10.70% in July 2012, underscoring continued distress in this segment of the commercial real estate market.
Lodging loan delinquencies also saw a significant swing, reversing the sharp 150 basis-point improvement in May by rising 42 basis points to 6.81% in June. According to Trepp, this volatility is notable, and in June the headline rate increase was mostly due to a reduction in the overall CMBS balance rather than a significant shift in the delinquent loan count.
These trends portray a commercial real estate market that remains under pressure, particularly in the office and lodging sectors, even as certain areas, such as multifamily, show some signs of stabilization.
