Pandemic downturn causes CMBS delinquencies to spike

The delinquency rate for commercial mortgage-backed securities rose to 9.04% at the end of June to $53.8 billion in loans. The rate of loans currently in delinquency is up from 1.41% at the end of March, the lowest rate since S&P began tracking the aggregate portfolio of U.S. CMBS, while the balance of those loans rose $17.1 billion in June alone.

A rise in both figures was to be expected as the portion of loans given a grace period on payments rose similarly in the preceding months. As of April 30, $45.1 billion in loans were in a grace period, making up about 7.6% of the total CMBS market. Those numbers have since receded, with only about 4% in a grace period, totaling $23.65 billion.

Retail-related loans had the highest delinquency rate among the major property type groups followed by lodging loans. The year-over-year change in the proportion of delinquent retail loans, however, didn't see much of an increase, while lodging loans saw a significant jump. Office loans saw the biggest decline in their share of the delinquent loan pool, dropping to 6.6% from 27.8%.