-

KBRA Releases Research – CMBS Loan Performance Trends: September 2022

NEW YORK--(BUSINESS WIRE)--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the September 2022 servicer reporting period. Following two consecutive months of double-digit declines, the delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) for September came in relatively unchanged month over month. The rate ticked down 2 basis points (bps) to 2.76% in September after posting monthly decreases of 16 bps and 17 bps in July and August, respectively, along with a 15-bp increase in June. In this report, KBRA provides observations across our $319.7 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

One notable trend is the continued growth in specially serviced office loans, which is up 11.6% to $2.8 billion since March 2022 among conduit CMBS. Further, office is the sole major property type to experience a rise in special servicing volumes. This is in contrast to other property types, which have experienced decreases in specially serviced volume ranging from 13.4% to 52.4% over the same period. While office/remote work trends have become clearer this year, overall demand for space is down as companies may be hesitant about making long-term commitments for office space, given economic uncertainty. These factors are likely to contribute to increased special service loan transfers in the sector.

By property type, the largest moves in the delinquency rate were reported for lodging (4.19%; -38 bps), retail (5.27%; +17 bps), industrial (0.33%; -16 bps), and mixed-use (3.89%; +9 bps). Looking at the combined percentage of delinquent and specially serviced loans, the rate for retail and mixed-use loans rose 42 bps and 44 bps to 8.59% and 6.3%, respectively, while lodging loans continued its decline (6.26%; -41 bps). The increase in the retail rate continues to be impacted by the mall sector which face issues of obsolescence, struggling retailers, and a weak financing environment for the sector. Additionally, mixed-use properties can frequently include an office component which, as mentioned, faces its own challenges.

Click here to view the report.

Related Publications

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.

Contacts

Catherine Liu, Associate, CMBS Ratings Surveillance
+1 (646) 731-1313
catherine.liu@kbra.com

Roy Chun, Senior Managing Director, CMBS Ratings Surveillance
+1 (646) 731-2376
roy.chun@kbra.com

Business Development Contact

Michele Patterson, Managing Director
+1 (646) 731-2397
michele.patterson@kbra.com

KBRA

Details
Headquarters: New York City, New York
CEO: Jim Nadler
Employees: 400+
Organization: PRI

Release Versions

Contacts

Catherine Liu, Associate, CMBS Ratings Surveillance
+1 (646) 731-1313
catherine.liu@kbra.com

Roy Chun, Senior Managing Director, CMBS Ratings Surveillance
+1 (646) 731-2376
roy.chun@kbra.com

Business Development Contact

Michele Patterson, Managing Director
+1 (646) 731-2397
michele.patterson@kbra.com

More News From KBRA

KBRA Releases Research – The Geography of Auto Loan ABS Performance

NEW YORK--(BUSINESS WIRE)--KBRA releases research examining state-level auto loan ABS performance across the U.S. Most auto ABS transactions are geographically diversified, limiting the impact of any single state on overall deal performance. However, geographic differences may be more relevant for whole-loan buyers and for securitizations with outsized concentrations in states performing meaningfully above or below expectations, particularly when those concentrations differ from a shelf’s histo...

KBRA Assigns Preliminary Ratings to PRKCM 2026-AFC6 Trust

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to 10 classes of mortgage-backed notes issued by PRKCM 2026-AFC6 Trust, a $327.8 million non-prime RMBS transaction. The underlying collateral consists of 793 residential mortgages, with fixed-rate mortgages (FRMs) and hybrid adjustable-rate mortgages (ARMs) representing 98.4% and 1.6% of the pool, respectively. The transaction includes a meaningful concentration of collateral that KBRA considers non-prime. All of the loans were origin...

KBRA Assigns Preliminary Ratings to Reach ABS Trust 2026-3

NEW YORK--(BUSINESS WIRE)--KBRA assigns preliminary ratings to five classes of notes issued by Reach ABS Trust 2026-3 (“Reach 2026-3”), an unsecured consumer loan ABS transaction. Credit enhancement consists of overcollateralization, subordination of junior note classes (except for the Class E notes), a cash reserve account funded at closing, and excess spread. This transaction represents Reach Financial, LLC’s (“Reach”, the “Servicer” or the “Company”) third term ABS securitization in 2026 and...
Back to Newsroom