KBRA Releases Research – CMBS Loan Performance Trends: August 2023

NEW YORK--(BUSINESS WIRE)--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the August 2023 servicer reporting period. The delinquency rate among KBRA-rated U.S. CMBS in August reached 4.16% as it topped 4%. There was a meaningful month-over-month (MoM) jump of 23 basis points (bps) on the heels of July’s 34-bp increase. However, the total delinquent and specially serviced loan rate had a smaller 1-bp MoM increase, reaching 6.45%, as nearly $900 million of last month’s $18.1 billion of specially serviced loans were returned to the master servicer or liquidated, which helped keep the overall rate in line with last month.

In August, CMBS loans totaling $1.8 billion were either transferred to special servicing or became newly delinquent, 32.8% ($603.9 million) of which was due to imminent or actual maturity default. Office continues to have the highest exposure, accounting for 41.4% ($762.3 million) of the newly specially serviced and newly delinquent loans, while retail came in second at 26.6% ($489.1 million), and mixed-use was third at 15.4% ($283.8 million).

Other key observations of the August 2023 performance data are as follows:

• All property types, excluding retail and industrial, have seen an increase in the MoM delinquency rate. Notably, mixed-use properties saw an 82-bp delinquency rate increase, another sharp increase after July’s 201-bp jump. This includes the 30-day delinquency of the $215 million 681 Fifth Avenue loan, secured by a mixed-use retail and office property in New York City. The loan is participated across five conduits.
• The 22-bp decrease in the current and specially serviced rate was the result of a handful of larger maturity defaults that were successfully extended and returned to the master servicer. These include The Shops at Mission Viejo ($291.1 million in RBSCF 2013-SMV), Westfield MainPlace ($140 million in UBSBM 2012-WRM), and 515 Madison Avenue ($96.3 million in WFRBS 2013-C11). The overall decline was offset by the 61-bp increase of the other property type category, mostly due to 515 Madison Avenue ($96.2 million in WFRBS 2013-C11), a leased-fee interest that was transferred to the special servicer.

In this report, KBRA provides observations across our $316.7 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

Click here to view the report.

Related Publications

• Securitized Multifamily and the Housing Affordability Gap
• Maui Wildfires: KBRA-Rated CMBS and CRE CLO Exposure
• KBRA-Rated CMBS and CRE CLO WeWork Exposure
• CMBS Servicer Advance Trends: Curtailment and Recovery
• CMBS Trend Watch: July 2023

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.