Office CMBS Delinquencies Increase as Overall Rate Holds Steady
The Trepp CMBS Delinquency Rate held steady at 3.09% in April, but the segment that everyone continues to watch closely saw its rate move higher again last month. Declines in the retail, lodging and multifamily rates offset a small increase in industrial loans and a bigger increase for office.
Office delinquencies rose 16 basis points in April to 2.77%, Trepp said. Although the delinquency rate is lower than that for retail or lodging, both retail and hotel delinquencies have declined over the past 12 months, where office late-pays have increased by more than 100 bps.
“Office remains the most heavily watched part of the market as firms look to aggressively reduce space,” wrote Trepp’s Manus Clancy. “Sublease space is at or near record highs in many markets as demand from big tech firms has eroded sharply. In addition, many companies are letting leases expire or are renewing for smaller footprints.”
- ◦Financing
