Delinquency rates for mortgages backed by commercial properties increased during the fourth quarter, the Mortgage Bankers Association (MBA) reports.
As of the end of the fourth quarter, 5.3% of CMBS loan balances were 30 days or more delinquent, up from 4.8% at the end of the third quarter, according to the MBA’s latest commercial real estate finance (CREF) Loan Performance Survey.
The share of loans that were delinquent increased for some property types, particularly office, lodging, retail, and multifamily. Delinquencies decreased for industrial properties.
”The delinquency rate for commercial mortgages increased during the final three months of 2024, with increases across most capital sources and property types,” says Mike Fratantoni, senior vice president and chief economist for the MBA, in a statement. “The challenges facing different sectors vary – with office properties perhaps facing the most challenging combination of weaker fundamentals and stubbornly high interest rates. However, despite the current conditions, other property types continue to benefit from a relatively strong economy.”
Among the report’s key findings, 1.0% of FHA multifamily and health care loan balances were 30 days or more delinquent in the fourth quarter, up from 0.87% at the end of the third quarter.
About 0.86% of life company loan balances were delinquent, down from 0.94% the previous quarter.
And 0.6% of GSE loan balances were delinquent, up from 0.5% the previous quarter.
Companies furnishing data to the MBA reported on $2.5 trillion of loans in December, representing 52% of the total $4.7 trillion in commercial and multifamily mortgage debt outstanding (MDO) based on the MBA’s third-quarter report.
Photo: Sigmund
