In August, Kroll Bond Rating Agency (KBRA) reported a slight decrease in the delinquency rate for KBRA-rated U.S. CMBS loans to 4.98%, down from 11 basis points in July. However, the overall distress rate for CMBS loans increased by 32 basis points to reach 8.36%.
Out of the $1.7 billion of newly added distressed CMBS loans in August, over half (64.6%) were due to imminent or actual maturity default. The office sector had the highest volume of new distressed loans at $928 million (54%), followed by multifamily at $500 million (29%) and retail at $203 million (11%).
While office properties had the largest dollar amount of new distress this month, KBRA noted that multifamily saw a significant increase with an additional 100 basis points after declining by 110 bps in July.
This rise was largely due to several factors including one loan totaling $220 million on Broadway Street being transferred as a specially serviced loan and six other delinquent loans worth a total of $141.8 million that were brought current but then transferred into special servicing.
The photo above shows one such property affected: Manhattan’s Financial District building located on Broadway Street known as “20 Broad St.” Photo courtesy ATTCK.
