According to a report from Trepp, souring office loans were the main driver behind a 7.36% spike in CMBS delinquencies during November. This brought the overall U.S. CMBS delinquency rate up by 42 basis points to 6.4%, compared to just 4.58% one year ago.
Specifically, office delinquencies saw an increase of approximately 100 basis points last month, reaching a rate of 10.38%. The rise was largely due to several large newly defaulted office loans that accounted for about sixty percent of the total change in delinquent loan amount reported by Trepp.
The largest new addition to this list was a $370 million floating-rate loan backed by Chicago’s AMA Plaza, which spans over one million square feet and is primarily used for officespace . While the property itself remains well-leased at this time, there is concern surrounding its floating coupon structure as SOFR rates have increased significantly since it was originated back in early2021.
Meanwhile, multifamily and lodging sectors also experienced monthly increases in their respective CMBSdelinquency rates – rising by94 and83 basis points each.However,the overall levels remain considerably lower than those seen withintheoffice sector specifically.
Pictured: AMA Plaza at330 N.WabashinChicago.Photo courtesyofBeacon Capital Partners.
In November,Trepp reported that souringoffice loans were responsiblefora significantincreaseof7.36% incmbsdelinquencies.This pushedtheoverallU.S.cmbsdelinquencyrateupto6
