CMBS delinquency rate sustains monthly slump

“Retail continued to have the highest delinquency rate (6.01%) by property type for the third consecutive month after eclipsing the lodging sector in April 2022,” CRED iQ explained. “New high-profile retail delinquencies this month included an $85.2 million loan secured by the Crossroads Center regional mall in Saint Cloud, MN. The loan became 30 days delinquent in June 2022 but has been in special servicing since October 2020.”

Special servicing rate, including delinquent and non-delinquent loans, was down to 4.64% in June from 5.17% in May.

“The lodging sector, which had a special servicing rate of 7.72%, exhibited the greatest month-over-month improvement among all property types. The retail sector had the highest special servicing rate (9.43%), weighted by relatively large mortgages secured by regional malls,” CRED iQ said in a statement. “In one of this month’s latest developments, the $210 million Eastview Mall and Commons loan transferred to special servicing on June 1, 2022. The borrower cited ongoing issues related to the pandemic; however, the loan also has an impending September 2022 maturity date in an unfavorable refinancing environment.”

Overall, the distressed rate of CMBS loans that are specially serviced, delinquent, or a combination of both, hovered at 4.95% in June. Distressed rates for all property types declined, except for office and industrial.