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KBRA Releases Research – CMBS Loan Performance Trends: November 2024

NEW YORK--(BUSINESS WIRE)--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the November 2024 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label commercial mortgage-backed securities (CMBS) in November increased to 5.95%, up 46 basis points (bps) from October. The total delinquent plus current but specially serviced loan rate (collectively, the distress rate) also increased by a slightly lower 30 bps to 8.95%. The jump in rates were driven by a second consecutive month of increases exceeding 100 bps in the office delinquency rate and another $1 billion+ of newly distressed office loans, pushing the overall distress rate in the sector to over 14%.

In November, CMBS loans totaling $2.1 billion were newly added to the distress rate, of which 51.4% ($1.1 billion) were due to imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (59.1%, $1.3 billion), followed by mixed-use (21.6%, $462.7 million), retail (7.2%, $155.4 million), and then multifamily (5.7%, $123.4 million).

Key observations of the November 2024 performance data are as follows:

  • The delinquency rate increased to 5.95% ($19 billion), compared to 5.49% ($17.5 billion) in October.
  • The distress rate increased 30 bps to 8.95% ($28.6 billion), versus 8.65% ($27.5 billion) in October.
  • The office distress rate reached 14.18%, with a jump of 95 bps. The increase was widespread with 26 office loans becoming newly distressed, including three with balances above $100 million. These include 225 Bush Street ($350 million across five transactions), 5 Penn Plaza ($260 million, four conduits), and 555 11th Street ($120 million, two conduits).
  • The mixed-use distress rate saw the biggest percentage increase of 136 bps with the addition of Prime Storage Fund II ($340 million, CGCMT 2021-PRM2) becoming nonperforming matured balloon after last month’s status of performing matured balloon. Although the loan is mostly secured by self-storage, it is classified as mixed-use, as the loan includes some office.
  • The Other property category had the biggest percentage drop of 171 bps, although the sector only represents about 5% of the overall portfolio. The decrease was driven by the return of the Milford Plaza Fee loan ($275 million, two conduits) to the master servicer.

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.

Click here to view the report.

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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.

Doc ID: 1007092

Contacts

Aryansh Agrawal, Senior Analyst, CMBS Ratings Surveillance
+1 646-731-1381
aryansh.agrawal@kbra.com

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

Media Contact

Adam Tempkin, Director of Communications
+1 646-731-1347
adam.tempkin@kbra.com

Business Development Contact

Andrew Foster, Director
+1 646-731-1470
andrew.foster@kbra.com

Kroll Bond Rating Agency, LLC

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

Release Versions

Contacts

Aryansh Agrawal, Senior Analyst, CMBS Ratings Surveillance
+1 646-731-1381
aryansh.agrawal@kbra.com

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

Media Contact

Adam Tempkin, Director of Communications
+1 646-731-1347
adam.tempkin@kbra.com

Business Development Contact

Andrew Foster, Director
+1 646-731-1470
andrew.foster@kbra.com

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