CMBS Delinquency Rate Falls After 6 Months of Increases

The delinquency rate for commercial mortgage-backed securities (CMBS) for September went into decline for the first time since February, dropping six basis points to 7.23%.

According to data from Trepp Inc., last month’s overall delinquent balance was $43.5 billion and the outstanding balance was $601.3 billion. These totals were down from $44.1 billion and $604.6 billion, respectively, in August.

Year-over-year, the overall CMBS delinquency rate is up 153 basis points from 5.70%

“Breaking it down by property type, every sector but one saw a delinquency rate retreat in September,” said Vivek Denkanikotte, Trepp research associate. “The lone sector to see an increase in rate was retail, which rose 34 basis points to 6.76% following back-to-back months of declines.”

Denkanikotte added, “In order of magnitude, sectors whose delinquency rates decreased month-over-month include lodging, which fell 73 basis points from 6.54% to 5.81%, its lowest rate since March 2024 when it was at 5.45%, followed by office, whose new rate of 11.13%, a 53 basis point drop from 11.66%, would still have been an all-time high prior to last month. The multifamily delinquency rate pulled back 27 basis points from 6.86% to 6.59%, still nearly double its rate one year ago (3.33% in September 2024), and finally, industrial’s delinquency rate decreased by four basis points from 0.60% to 0.56%.)