KBRA Releases Research ? CMBS Loan Performance Trends: June 2023
KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the May 2023 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) decreased 23 basis points (bps) in June to 3.59% from the prior month. The improvement came on the heels of May's sharp rise, one of the largest monthly increases since the figure last peaked in June 2020. Meanwhile, the total delinquent and specially serviced loan rate climbed higher, piercing 6% with a 12-bp month-over-month (MoM) increase.
In June, a total of $2.2 billion CMBS loans were either transferred to specially servicing or became newly delinquent, 61.7% ($1.4 billion) of which were due to imminent or actual maturity default. Office accounts for over one-half of the newly specially serviced and newly delinquent loans, at 50.8% ($1.1 billion), while retail properties came in second at 22% ($488.9 million).
Other key observations of the June 2023 performance data are as follows:
- The decrease in the delinquency rate was broad, with retail, mixed-use, office, and lodging properties all declining more than 20 bps MoM. One of the larger loans that is no longer reported as delinquent is the $782.8 million 375 Park Avenue loan (CGCMT 2013-375P, COMM 2013-CCRE8), a Class-A office property (the Seagram Building) in New York City. The loan was classified as a nonperforming matured balloon as of the May reporting period, but it has since been extended. It is now reported as current but remains with the special servicer.
- As with 375 Park Avenue, many of the prior month's delinquent loans that are now categorized as current or performing matured remain with the special servicer. In addition, there continues to be loans being transferred to special servicing for imminent payment or maturity default. As a result, the current and specially serviced rate increased 35 bps to 2.48% ($7.3 billion) in June, from 2.13% ($6.3 billion) in May. This has pushed the total delinquent and specially serviced loan rate to 6.07%.
In this report, KBRA provides observations across our $316 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.
Click here to view the report.
Related Publications
- CMBS Trend Watch: May 2023
- CMBS Loan Performance Trends: May 2023
- Freddie Mac K-Series: First-Quarter 2023 Defeasance and Supplemental Debt Plummet After Record High in 2022
- What Debt Yield Reveals About Upcoming Office Maturities
About KBRA
KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA's ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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