In its look at November 2024 CMBS delinquency, Trepp has calculated that the overall delinquency rate rose 42 basis points to 6.40%. Office, multifamily, and lodging all saw “substantial increases.”
A growing delinquency rate has been a problem for a while, as the firm has tracked and reported. But something in the update was important to notice — that office, multifamily, and lodging properties were “largely responsible” for the increase. One thing that GlobeSt.com confirmed with Trepp: “Delinquency rates are based on dollar values, not solely the number of loans in trouble.”
Trying to understand the state of loans from CMBS alone is difficult. The loan type is far from representative of all lending, and gives a biased view, although a publicly available one, which is better than nothing. The other issue is the dollar measurement because a few large deals going badly are enough to shift the overall balance of performance.
Recommended For You
Even though the average delinquency increase was 42 basis points, each of the lodging, multifamily, and office sectors saw their delinquency rates jump 80 basis points. Accounting for loans removed from the delinquency category, lodging was up 83 basis points to 6.92%. Multifamily was up 94 basis points to 4.18%. Office was up 101 basis points to a 10.38% rate. The only category delinquency rate that fell was for retail, off 25 basis points to 6.57%.
A handful of big loans coming in can make the entire picture look bleaker than maybe it is given the impact may be from a small number of loans. Regulators say CRE is still a problem; however, S&P Global Market Intelligence says things are in better shape than are often thought.
“Most bankers you talk to about this stuff are tired of talking about it because they think it’s been too overhyped,” Nathan Stovall, director of financial institutions research at S&P Global Market Intelligence, previously told GlobeSt.com. “Even a few months ago you had big firms saying, ‘There will be hundreds of banks failing.’ I don’t see that as the case at all.”
CMBS isn’t traditional bank lending, but it is an indicator that gets a lot of attention. “In November 2024, the CMBS market experienced notable shifts in credit activity, from newly delinquent, cured, and modified loans,” wrote Vivek Denkanikotte, a Trepp research associate. Again, problems were concentrated by dollar volume in a smaller number of larger problematic loans.
For example, the $506.3 million JPMCC 2021-NYAH Portfolio loan for a portfolio of 53 multifamily buildings comprising 3,531 residential units and 23 commercial units throughout several of New York City’s boroughs. It now has the status of a non-performing matured balloon.
A 1.2 million-square-foot class A office property located in Chicago’s central business district is collateral against the $370 million AMA Plaza loan. The $280 million New York Hospitality portfolio is in special servicing for imminent default.
Trying to understand the state of the market means digging deeply enough to see not just average conditions, which are important, but the distribution of the problems.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
