CMBS Delinquency Rate Surges to 7.46%

The delinquency rate for commercial mortgage-backed securities (CMBS) surged by 23 basis points in October to 7.46%, according to new data from Trepp Inc. One year ago, the delinquency rate was at 5.98%, a difference of 148 basis points.

Last month, the overall delinquent balance rose $1.1 billion to $44.6 billion while the outstanding balance decreased $3.2 billion to $598.1 billion.

“All five of the major property types saw increases in their respective delinquency rates,” said Vivek Denkanikotte, research associate. “The largest rate increase was seen in the office sector, which soared 63 basis points in October to set a new all-time high of 11.76%, after retreating by over 50 basis points the month prior. Earlier this year, the office delinquency rate hit new record highs of 11.08% in June and 11.66% in August, both now eclipsed by October’s new peak. The second-largest rate increase was in multifamily, which rose 53 basis points to 7.12%, and topped the 7% threshold for the first time in nearly 10 years (December 2015).”

Among the other commercial property sectors, the industrial delinquency rate was up by eight basis points to 0.64%, the lodging delinquency rate was up by 26 basis points to 6.00%, and the retail delinquency rate was up by 15 basis points to 6.60%.