CMBS delinquencies resume downward movement

Read more: Commercial and multifamily originations slow on economic uncertainty

“The rapid changes taking place across space, equity, and debt markets are having a significant effect on commercial and multifamily real estate transaction volumes,” said Jamie Woodwell, MBA’s vice president for commercial real estate research.

“As with the economic uncertainty created by the backdrop of high inflation and rising interest rates, we may not see clear trends in the delinquency rate for the next few months,” KBRA wrote in its release.

The lodging sector recorded the biggest delinquency improvement in July, down 48bps to 4.82%. Retail (down 18bps to 5.38%) and multifamily (down 16bps to 1.09%) followed. Meanwhile, mixed-use, office, and industrial each generated a monthly increase. The combined percentage of delinquent and specially serviced loans declined six basis points to 4.58%.

“Most commercial real estate market fundamentals remain strong, with significant increases in the incomes and values of many properties in recent years. These factors are why MBA expects loan demand to begin to bounce back in 2023 and 2024,” Woodwell said.