KBRA Releases Research – CMBS Loan Performance Trends: September 2022
September 28 2022 - 10:22AM
Business Wire
KBRA releases a report on U.S. commercial mortgage-backed
securities (CMBS) loan performance trends observed in the September
2022 servicer reporting period. Following two consecutive months of
double-digit declines, the delinquency rate among KBRA-rated U.S.
commercial mortgage-backed securities (CMBS) for September came in
relatively unchanged month over month. The rate ticked down 2 basis
points (bps) to 2.76% in September after posting monthly decreases
of 16 bps and 17 bps in July and August, respectively, along with a
15-bp increase in June. In this report, KBRA provides observations
across our $319.7 billion rated universe of U.S. private label CMBS
including conduits, single-asset single borrower (SASB), and large
loan (LL) transactions.
One notable trend is the continued growth in specially serviced
office loans, which is up 11.6% to $2.8 billion since March 2022
among conduit CMBS. Further, office is the sole major property type
to experience a rise in special servicing volumes. This is in
contrast to other property types, which have experienced decreases
in specially serviced volume ranging from 13.4% to 52.4% over the
same period. While office/remote work trends have become clearer
this year, overall demand for space is down as companies may be
hesitant about making long-term commitments for office space, given
economic uncertainty. These factors are likely to contribute to
increased special service loan transfers in the sector.
By property type, the largest moves in the delinquency rate were
reported for lodging (4.19%; -38 bps), retail (5.27%; +17 bps),
industrial (0.33%; -16 bps), and mixed-use (3.89%; +9 bps). Looking
at the combined percentage of delinquent and specially serviced
loans, the rate for retail and mixed-use loans rose 42 bps and 44
bps to 8.59% and 6.3%, respectively, while lodging loans continued
its decline (6.26%; -41 bps). The increase in the retail rate
continues to be impacted by the mall sector which face issues of
obsolescence, struggling retailers, and a weak financing
environment for the sector. Additionally, mixed-use properties can
frequently include an office component which, as mentioned, faces
its own challenges.
Click here to view the report.
Related Publications
- CMBS Trend Watch: August 2022
- CMBS Loan Performance Trends: August 2022
- SFR Securitizations: A Decade in the Making
About KBRA
KBRA is a full-service credit rating agency registered in the
U.S., the EU, and the UK, and is designated to provide structured
finance ratings in Canada. KBRA’s ratings can be used by investors
for regulatory capital purposes in multiple jurisdictions.
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Catherine Liu, Associate, CMBS Ratings Surveillance +1 (646)
731-1313 catherine.liu@kbra.com
Roy Chun, Senior Managing Director, CMBS Ratings Surveillance +1
(646) 731-2376 roy.chun@kbra.com
Business Development Contact
Michele Patterson, Managing Director +1 (646) 731-2397
michele.patterson@kbra.com