News

CRE Finance Council has released a report on CMBS loan performance for November.*

Key takeaways:

DELINQUENCY RATE SURGES ABOVE 6%

• Conduit/SASB CMBS combined delinquency of 6.40%
• Delinquency rate has increased in nine of the last 11 months
• On a YOY basis, the overall combined delinquency rate is up 182 bps (6.40% vs. 4.58% in November 2023)

• Office delinquency rate surged 101 bps in November to 10.38%, following a similar increase in October
• Office loans accounted for more than 60% of the net increase in the overall dollar amount of delinquent loans in November
• Office delinquency rate is up 430 bps YOY
• Convergence of WFH demand shock, elevated rates (despite year-to-date Fed rate cuts), and a pullback in bank lending will continue to present office financing headwinds

• November delinquency rate is still 392 bps below the 10.32% peak in June 2020 – the height of pandemic-related lockdowns

• Loans in special servicing (SS) rose 39 bps to 9.53% in November, second-largest uptick of 2024 after April’s 80 bp increase
• SS rate is at highest level since April 2021 and has increased every month of 2024; now 275 bps higher than the 6.78% mark at year-end 2023

• In a report dated 12/6/24, BofA Global Research examined YTD pay-off trends for conduit loans
• In one analysis, pay-off rates were calculated by property type and loan size; successful pay-off rates decreased as loan size increased, with office loans facing the most significant challenges
• Among IO loans, only 56% of loans paid off, below the 62% across the overall sample; among amortizing loans, a much higher 81% paid off on time

*Source: Trepp. CMBS data in this report reflect a total outstanding balance of $629B: 56.4% ($354.9B) conduit CMBS, 43.6% ($274.1B) single-asset/single-borrower (SASB) CMBS.

Click here to download the full report. Contact Raj Aidasani for more information on CMBS loan performance.