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CREFC's December 2022 Monthly CMBS Loan Performance Report

December 2022 Monthly CMBS Loan Performance

CRE Finance Council has released a report on .*

Key takeaways:

DELINQUENCY RATE INCHES ABOVE 3% TO END THE YEAR; SS RATE DOWN

 

 

  • CMBS Delinquency Above 3% - First Time Since July 2022
    • The CMBS delinquency rate increased 5 bps in December to 3.04%. After reaching a post-COVID low of 2.92% in September 2022, the delinquency rate has notched upward for three consecutive months.
    • We anticipate the delinquency rate being more volatile going forward, given the challenging macro environment. This reflects both heightened market volatility and a growingly unfavorable landscape for lenders in refinancing loans at higher rates and potentially lower asset valuations as cap rates rise and property-level cash flows decline.
  • Following Four Consecutive Increases, Special Servicing Rate Notches Down
    • The SS rate was down 3 bps in December to 5.17%; this follows four consecutive monthly increases, including a 23 bp increase in November. While the SS rate remains well below its high of 10.48% (in September 2020), the height of the pandemic, higher benchmark rates, and the real risk of an economic slowdown suggest asset valuations may deteriorate, increasing the potential for more loans to be transferred to SS in 2023 than seen to date.
    • Based on feedback from servicers, most COVID-related forbearances have returned to their original loan terms and are performing as expected. A few loans are still in forbearance or have been modified, and those are also generally paying as modified. In addition, servicers report that loans currently entering SS are almost all related to the market downturn over the last year (versus COVID-related reasons).

DECEMBER REMIT REALIZED LOSSES

  • 10 loans ($198.9mm) across 9 CMBS transactions liquidated with realized losses of $131.5 million in the December remit period.

 

 

*Source: Trepp. CMBS data in this report reflect a total outstanding balance of $626.5 billion: 60.2% ($377.1B) conduit CMBS, 39.8% ($249.4B) single-asset/single-borrower (SASB) CMBS.

to download the full report. Contact for more information on CMBS loan performance.

Contact 

Raj Aidasani
Senior Director, Research
646.884.7566
raidasani@crefc.org
The information provided herein is general in nature and for educational purposes only. CRE Finance Council makes no representations as to the accuracy, completeness, timeliness, validity, usefulness, or suitability of the information provided. The information should not be relied upon or interpreted as legal, financial, tax, accounting, investment, commercial or other advice, and CRE Finance Council disclaims all liability for any such reliance. © 2023 CRE Finance Council. All rights reserved.

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