Overall, delinquency rates for commercial mortgages were flat during the first quarter compared with the second quarter, but loans backed by office properties continued to see a rise in delinquencies, according to the Mortgage Bankers Association.
“While overall delinquencies remained flat, the delinquency rate for loans backed by office properties rose again during the first three months of this year,” says Jamie Woodwell, head of commercial real estate research for the MBA, in a statement. “Loans across property types are adjusting to higher interest rates and uncertainty about property values, but the continued fog around the impact of hybrid work adds another challenge for office properties and their loans.”
“The commercial real estate market is large and diverse, with a wide mix of property types, geographic markets and submarkets, property and loan sizes, owners, lenders, vintages, and other characteristics,” Woodwell adds. “With 20 percent of the $4.7 trillion of outstanding commercial mortgage debt maturing this year, each of those factors will play a part in determining which loans may face challenges and which may not.”
According to MBA’s commercial real estate finance Loan Performance Survey, 96.8% of outstanding loan balances were current or less than 30 days late at the end of the quarter, unchanged from the previous quarter.
About 2.5% were 90-plus days delinquent or in REO, up from 2.3% the previous quarter, while 0.3% were 60-90 days delinquent, unchanged from the previous quarter, and 0.4% were 30-60 days delinquent, down from 0.6%.
Photo: Abbe Sublett
