In December, the overall U.S. CMBS delinquency rate increased by 22 basis points to reach 2.98%, up from November’s rate of 2.76% and significantly higher than last year’s rate of 2.31%. This rise was primarily due to a surge in office delinquencies and a decrease in resolution volume.
Specifically, five large office loans with balances over $60 million became newly delinquent, totaling $1.03 billion and making up half of all new delinquencies and 81% of new office-related ones. As a result, there was an increase of 92 basis points in CMBS office delinquencies, which ended the year at a high of7 .18%.
The total amount for new overdue payments lasting more than sixty days rose from $1 .76 billion in November to$2 .08 billion in December2024 , mainly because several larger balance loans for offices were affected.The majority (61%)of these new defaults were attributed to offices ($1 .27billion), followed by retail (15%, or$309million), mixed use(12%, or$258million)and multifamily properties(5%,or$92million). Of these defaults,$1 .06billion resulted from term issues while maturity problems accounted for the remaining49 %($I.OZbillion).
However,the volume offailed resolutions decreased significantlyfromNovember’s levelof$I48 milliontojustS586 millioninDecember.This is well belowthe monthly averagefor theyearwhichwasSI.O5bill ion.
Pictured: Worldwide Plaza locatedinNewYorkCity,isoneoffiveofficepropertieswithlargebalances that have recently become newlydelinquentand are contributingtotheoverallincreaseindelinquencyratesforCMBSloans.
