NEW YORK–(BUSINESS WIRE)–#KBRA–KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the July 2023 servicer reporting period. After a slight improvement in June, the delinquency rate among KBRA-rated U.S. CMBS rose sharply in July to 3.93%, a 34-basis point (bp) increase. The total delinquent and specially serviced loan rate continued trending upward for the fourth straight month to 6.44%, with a 37-bp month-over-month (MoM) increase.
In July, CMBS loans totaling $2.6 billion were either transferred to special servicing or became newly delinquent, 51.9% ($1.3 billion) of which was due to imminent or actual maturity default. Office continues to have the highest exposure, accounting for 34.7% ($898.4 million) of the newly specially serviced and newly delinquent loans, while retail properties came in second at 26.4% ($683.4 million), and mixed-use came in third at 23.7% ($613.9 million).
Other key observations of the July 2023 performance data are as follows:
- All property types, excluding lodging and industrial, have seen an increase in the MoM delinquency rate. Notably, mixed-use properties saw a 201-bp delinquency rate increase, primarily driven by the payment default of the $588 million Westfield San Francisco Centre loan, secured by a mixed-use retail and office property in the Union Square submarket of San Francisco. The loan collateralizes DBJPM 2016-SFC, a single-asset single borrower (SASB) transaction, and is also participated across five conduits.
- During the July remittance period, multiple office properties have been transferred to special servicing due to imminent monetary default, including Prudential Plaza ($388.6 million across six conduits), 315 West 36th Street ($77 million in BMARK 2018-B3 and COMM 2018-COR3), Hall Office Portfolio ($56.4 million in BMARK 2021-B31), and 600 Vine ($50 million in CSAIL 2017-CX10 and CSAIL 2018-CX11). As a result, the total delinquent and specially serviced loan rate for office has increased 56 bps MoM to 7.22%.
In this report, KBRA provides observations across our $314.8 billion rated universe of U.S. private label CMBS including conduits, SASB, and large loan (LL) transactions.
Click here to view the report.
Related Publications
- CMBS Trend Watch: June 2023
- CMBS Loan Performance Trends: June 2023
- KBRA CMBS Loss Compendium Update: June 2023
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Cammy Wan, Senior Analyst, CMBS Ratings Surveillance
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Roy Chun, Senior Managing Director, CMBS Ratings Surveillance
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