In December, Fitch Ratings reported an increase in the overall delinquency rate for U.S. CMBS loans to 2.98%, up from 2.76% in November and 2.31% a year ago, representing a rise of 22 basis points.
This spike was primarily driven by a surge in office delinquencies and reduced resolution volume.
Five large office loans with balances exceeding $60 million became newly delinquent during the month, totaling $1.03 billion and accounting for half of all new delinquencies as well as 81% of new office-related defaults.
As a result, there was also an uptick of 92 basis points in CMBS office loan defaults which ended at an overall rate of7 .18%.
The total amount for newly defaulted loans over sixty days increased to $2 .08 billion from November’s figureof$1 .76billion , mainly due to several larger balanceoffice loans .
Office properties made up the majority share (61%)of these new defaults at$1 .27billion , followed by retail (15%, or$309million), mixed-use(12 %,$258million)and multifamily(5 %,$92 million).
Of these newly defaulted properties , term defaultswere responsiblefor51%(or$1 .06billion), while maturitydefaults accountedforthe remaining49 %(or $I.OZbill ion).
Ontheotherhand,resolutionvolume decreasedtoS586millioninDecemberfromNovember’sfigureof$I48Omill ion.Thiswasbelowth e monthly average for theyearwhichstoodatSI.OS bill ion .
Pictured: Worldwide Plaza locatedinNewYorkCity,isoneoffivepropertiesbackingthenewlydelinq uentlarge officeloans.
In December, Fitch Ratings reported that the overall U.S. CMBS loan default rate had risen by22basispoints,to close out2024 at2.98%. This was a significant increase from November’s rate of 2.76% and even higher than the previous year’s rate of 2.31%. The main contributing factors to this rise were an increase in office loan defaults and a decrease in the number of resolved loans.
During December, five large office loans with balances exceeding $60 million became newly delinquent, totaling $1.03 billion.This accounted for half of all new delinquencies and a staggering81%of new office-related defaults.As a result,the overall CMBS default rate foroffice properties increased by92basispoints,to7 .18%.
The total amount for newly defaulted loans over sixty days also saw an uptick,reaching$2 .08billioncomparedtoNovember’s figureof$1 .76billion.Thiswaslargely due to several larger balanceoffice loans becomingdelinquent.Office properties made upthe majority share (61%)of these newdefaultsat$1 .27billion,followedbyretail(15%,or$309million),mixed-use(12 %,$258million)and multifamily(5 %,$92 million).
Of these newly defaulted properties , term defaultswere responsiblefor51%(or $I.OZbill ion),while maturitydefaults accountedforthe remaining49 %(or$I.OZ bill ion).Ontheotherhand,resolutionvolume decreasedtoS586millioninDecemberfromNovember’sfigureof$I48Omillion.Thiswasbelowth e monthly average for theyearwhichstoodatSI.OS bill ion .
Pictured: Worldwide Plaza locatedinNewYorkCity,isoneoffivepropertiesbackingthenewlydelinq uentlarge officeloans.
