**Office and Multifamily CMBS Delinquencies Reach New Highs in August**
Multifamily and office commercial mortgage-backed securities (CMBS) delinquencies surged in August, according to a report from Trepp. The multifamily sector experienced a significant increase of 71 basis points, rising to 6.86%. This marks the highest delinquency rate for apartments in nine years. Meanwhile, office sector delinquencies climbed 62 basis points, reaching a record-setting high of 11.66%.
In contrast, the retail sector exhibited improvement. Retail CMBS delinquencies fell by 48 basis points to 6.42%—the lowest rate observed in the last 12 months.
Overall, CMBS delinquencies rose for the sixth consecutive month in August, increasing by six basis points to a total delinquency rate of 7.29%. While this is a concerning trend, it remains below the all-time peak of 10.34% reached in August 2012.
The dollar amount of delinquent commercial real estate debt also ticked up. In August, the total delinquent balance stood at $44.1 billion, up from $43.3 billion the previous month. Concurrently, the total outstanding balance of CMBS increased to $604.6 billion, compared to $598.9 billion in July.
The office sector was the leading contributor to the month-over-month increase in delinquencies. Newly delinquent office loans totaled $2.5 billion, outpacing $1.3 billion in loan cures, further underscoring the sector’s continued struggles in the post-pandemic environment.
