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 a fourth consecutive quarter of increases in delinquency rates for loans backed by commercial properties.
At 5.1%, office property loans now have a higher delinquency rate than retail and hotel property loans, while multifamily and industrial property loan delinquencies remain below 1%. Jamie Woodwell, MBA’s head of commercial real estate research, stated that these trends are due to challenges faced by commercial markets such as uncertainty about fundamental factors, lack of transparency in current property values, and fluctuating interest rates.
Woodwell emphasized that this slow but steady rise in delinquencies is primarily seen among loans facing these specific challenges rather than across all types of properties. The post titled “CRE Loan Delinquencies Post Four Consecutive Quarters of Increases” was originally published on Connect CRE’s website.
