Commercial Mortgage Delinquency Rates Jumped to End 2023


Delinquency rates for mortgages backed by commercial properties increased during the fourth quarter of 2023, according to the Mortgage Bankers Association’s (MBA) commercial real estate finance (CREF) Loan Performance Survey.

“Delinquency rates jumped to 6.5 percent of balances for loans backed by office properties and to 6.1 percent for lodging-backed loans,” says Jamie Woodwell, MBA’s head of commercial real estate research.

“Delinquencies for loans backed by retail properties remain elevated from the onset of the pandemic but were unchanged during the quarter,” Woodwell adds. “Delinquency rates for multifamily and industrial property loans both increased marginally but remain much lower.”

According to the MBA, 96.8% of outstanding loan balances were current or less than 30 days late at the end of the third quarter, down from 97.3% at the end of the third quarter of 2023.

Diving deeper, 2.3% were 90+ days delinquent or in REO, up from 2.2% the previous quarter; 0.3% were 60-90 days delinquent, up from 0.2% the previous quarter; and 0.6% were 30-60 days delinquent, up from 0.3%.

Among capital sources, CMBS loan delinquency rates saw the highest levels, with 5.1% of CMBS loan balances 30 days or more delinquent, up from 4.4% last quarter.

Non-current rates for other capital sources remained more moderate: 0.9% of FHA multifamily and health care loan balances were 30 days or more delinquent, up from 0.8%; 0.9% of life company loan balances were delinquent, up from 0.7%; and 0.5% of GSE loan balances were delinquent, up from 0.4%.

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