In this report, KBRA provides observations across our $317.3 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.
KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the January 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in January meaningfully climbed from December, rising almost 10% to 4.61%. The total delinquent and specially serviced loan rate (distress rate) also jumped more than 11% to 7.39%. Office experienced the most significant increase, climbing 233 basis points (bps) to 10.88%.
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CMBS loans totaling $3.4 billion were newly added to the distress rate this reporting period, and more than one-half (53.7%, $1.8 billion) stemmed from imminent or actual maturity default. As noted, the office sector represented the largest portion (74.7%, $2.5 billion) of newly distressed loans. The mixed-use sector came in second, accounting for 11.3% ($385.2 million) of newly distressed loans, followed by retail at 11.1% ($376.4 million).
Other key observations of the January 2024 performance data are as follows:
- The office sector’s distress rate jumped 233 bps to 10.88% from 8.55% in December. This was largely due to 280 Park Avenue ($1.1 billion in PRK 2017-280P) and One Market Plaza ($975 million in OMPT 2017-MKT) having been transferred to special servicing this month, both for imminent maturity default.
- Multifamily experienced a decline of 59 bps in its distress rate. The decrease is primarily driven by the liquidation of the Veritas multifamily portfolio securing GSMS 2021-RENT, which resulted in a reported 43% loss on the original securitized balance. However, the loss includes a substantial reserve holdback that could reverse much of the losses if released.
In this report, KBRA provides observations across our $317.3 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.
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