CMBS Delinquency Rate Rises Above 5% in June 2024

The commercial mortgage-backed securities (CMBS) delinquency rate climbed back above the 5% mark in June 2024, according to new data from Trepp LLC. The rate increased 38 basis points to 5.35%, marking the fourth increase in the past six months. Year-over-year, delinquencies are up by 145 basis points, highlighting ongoing financial strain in the commercial real estate sector.

Office Sector Leads the Increase

The net increase in delinquent loans across the five major commercial property sectors last June totaled nearly $2 billion, with the office sector accounting for half of that growth. Newly delinquent office loans for the month reached $1.87 billion, though this was partially offset by $900 million in previously delinquent office loans that became current.

Delinquency Rates by Property Type

• Office: Up 61 basis points to 7.55%

• Retail: Up 48 basis points to 6.42%

• Industrial: Up 12 basis points to 0.62%

• Lodging: Up 10 basis points to 6.32%

• Multifamily: Up 66 basis points to 2.36%

With delinquencies rising across multiple sectors, the commercial real estate market continues to face growing financial pressures, particularly in the office and retail sectors. The sustained increase in delinquencies underscores broader economic challenges, shifting demand, and ongoing concerns about the stability of certain commercial property types.