KBRA Releases Research - CMBS Loan Performance Trends: April 2024
KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the April 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in April increased moderately to 4.67%, up 17 basis points (bps) from March. However, the total delinquent and specially serviced loan rate (distress rate) markedly increased 79 bps to 8.29%. The jump in distress rate was largely driven by the multifamily sector, which saw two loans totaling over $1.5 billion transferring to the special servicer this reporting period, although retail (79 bps) and mixed-use (76 bps) also experienced some large increases.
CMBS loans totaling $3.3 billion contributed to the increase in the distress rate this reporting period, with 35.8% ($1.2 billion) stemming from imminent or actual maturity default. As noted, the multifamily sector represented the largest portion (44.3%, $1.5 billion) of newly distressed loans. The office sector, which remains steady since 2023, came in second, accounting for 26.8% ($886.1 million) of newly distressed loans, followed by retail at 19.2% ($634.7 million).
Other key observations of the March 2024 performance data are as follows:
- The delinquency rate increased 17 bps to 4.67% ($13.9 billion), compared to 4.5% ($13.4 billion) in March.
- The distress rate increased 79 bps to 8.29%, compared to 7.5% in March.
- Multifamily continued its climb in distress rate, with a sharp increase of 429 bps. This is largely due to the transfers of Parkmerced ($1.3 billion in MRCD 2019-PARK and conduit transactions) and Hatteras Multifamily Portfolio ($346 million in NCMF 2022-MFP), both of which are discussed further below.
- The retail sector saw the second-largest increase in distress rate, with two notable retail properties being transferred to the special servicer due to maturity defaults after having been previously modified and extended, including Yorktown Center, a super regional mall outside Chicago, Illinois ($120.5 million in CG-CCRE 2014-FL1, large loan (LL)) and Providence Place Mall, an anchored retail center in Providence, Rhode Island ($254.9 million in DBUBS 2011-LC3, LL).
- Mixed-use and office also continue to see their distress rate climb, which for this month includes four newly specially serviced or delinquent loans ranging in balance from $130 million to $250 million with component pieces spread across numerous conduits. These include two New York City office loans, 25 Broadway ($250 million) and 225 & 233 Park Avenue South ($235 million); one Seattle office portfolio, Selig Portfolio ($239.8 million); and another in Santa Clara, California, Nvidia Santa Clara ($130 million).
In this report, KBRA provides observations across our $315.9 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and LL transactions.
Click here to view the report.
Related Publications
- Securitized Multifamily: Markets Can Matter for Maturities
- CMBS Trend Watch: March 2024
- CMBS Loan Performance Trends: March 2024
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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