-

KBRA Releases Research – CMBS Loan Performance Trends: December 2022

NEW YORK--(BUSINESS WIRE)--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the December 2022 servicer reporting period. The delinquency rate among KBRA-rated U.S. CMBS rose 8 basis points (bps) in December 2022 to 2.97%, up from 2.89% in November and a low of 2.76% in September 2022. The rate has now increased for three consecutive months; however, it remains below the year-end (YE) 2021 rate of 4.06%. By property type, multifamily (1.83%; +27 bps), retail (5.73%; +20 bps), and office (1.58%; +13 bps) reported delinquency rate increases for the month while mixed-use declined 20 bps to 3.61%.

In this report, KBRA provides observations across our $319.6 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

A total of $1.3 billion of newly delinquent loans were reported in the final month of the year, the same level as last month. More than three-quarters of the delinquencies were reported as nonperforming matured balloons—up from 50% in November. In addition, of the $819.6 million transferred to the special servicer this reporting period, over 80% identified imminent or actual maturity default as the reason compared to 70% last month.

This month the maturity defaults and imminent maturity defaults were led by several large office loans including:

  • $327.7 million Wells Fargo Center (MSC 2019-NUGS)
  • $243.6 million Republic Plaza (WFRBS 2012-C10 & WFRBS 2013-C11)
  • $130.0 million Federal Center Plaza (COMM 2013-CR6)
  • $103.7 million 515 Madison Avenue (WFRBS 2013-C11)
  • $98.2 million Gateway Center (JPMCC 2013-C10)

Notably, none of the loans were reported as delinquent during their respective terms, and the assets are geographically diverse, as they are situated in Denver, Washington, D.C., New York City, and Pittsburgh. The refinancing difficulties are likely indicative of capital market disruption owing to the uncertain interest rate and economic outlook, as well as ongoing concerns about remote and hybrid work’s impact on the office sector.

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

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

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