According to the latest CREF Loan Performance Survey from the Mortgage Bankers Association (MBA), delinquency rates for mortgages backed by commercial and multifamily properties have risen during the third quarter of 2023. This marks four consecutive quarters of increases in delinquency rates for loans backed by commercial properties.
Jamie Woodwell, head of commercial real estate research at MBA, reports that office property loans now have a higher delinquency rate at 5.1% compared to retail and hotel property loans. Meanwhile, multifamily and industrial property loan delinquencies remain below 1%.
Woodwell explains that uncertainty about certain properties’ fundamentals, lack of transparency in current property values, and fluctuating interest rates are contributing factors to this trend. As a result, there has been a gradual rise in delinquencies among loans facing these challenges.
The article “CRE Loan Delinquencies Post Four Consecutive Quarters of Increases” was originally published on Connect CRE’s website.
