KBRA Releases Research - CMBS Loan Performance Trends: March 2024

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the March 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) in March remained steady at 4.5%, up 2 basis points (bps) from February. The total delinquent and specially serviced loan rate (distress rate) also remained steady at 7.5% compared to 7.47% last month. The minor increase in distress rate was led by multifamily with a month-over-month (MoM) increase of 27 bps, followed closely by office (26 bps) and lodging (19 bps).

CMBS loans totaling $1.1 billion contributed to the distress rate this reporting period, and 39.8% ($419 million) stemmed from imminent or actual maturity default. The office sector, as it has done each month over the past year, represented the largest portion (57.9%, $609.1 million) of newly distressed loans. The retail sector came in second, accounting for 14.6% ($153.4 million) of newly distressed loans, followed by mixed-use at 10.8% ($113.5 million).

Other key observations of the March 2024 performance data are as follows:

• The delinquency rate increased 2 bps to 4.5% ($13.4 billion), compared to 4.48% ($13.3 billion) in February.
• The distress rate, which increased 3 bps, was led by multifamily (up 27 bps to 3%), although the sector is below its peak of 4.02% at year-end 2023.
• Office continued its upward climb reaching 11.26% with a MoM increase of 26 bps as three loans each in excess of $100 million in unpaid principal balance were sent to special servicing.
• The retail sector saw a sizable drop in the distress rate mainly due to the Woodbridge Center loan ($250 million original balance in WFRBS 2014-C20 and WFCM 2014-LC16), which was disposed of through a receiver sale resulting in a 62.353.2% loss on the loan.

In this report, KBRA provides observations across our $314.5 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.

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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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