Commercial distress rate spikes amid market slowdown

Among the other property types, retail has the highest delinquency rate – climbing for the fourth month in a row to 5.91%. It has surpassed the lodging sector, which registered a 5.63% delinquency rate. The office delinquency rate also increased to 1.52%, while industrial and self-storage properties were relatively unchanged at 0.29% and 0.02%, respectively.

On top of that, CRED iQ’s special servicing rate (includes delinquent and non-delinquent loans) increased 44 basis points to 4.91% – pushing the overall distressed rate (delinquencies + special servicing rates) up to 5.10% of CMBS loans that are specially serviced, delinquent, or a combination of both.

Despite higher delinquency rates, some experts believe the commercial real estate market continues to perform well.

“Lenders are cautious, appropriately so, and the equity is appropriately cautious. So that means everything has slowed down, and I’ve seen deals put on hold or cratered altogether because of this,” real estate advisor Joseph Rubin told Mortgage Professional America in an exclusive interview.