BRA Unveils Latest Research: Insights into CMBS Loan Performance Trends for April 2024

KBRA Publishes Report on U.S. CMBS Loan Performance Trends for April 2024

KBRA has released a comprehensive analysis of the U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed during the April 2024 servicer reporting period. The report highlights key findings, including changes in delinquency rates and distress rates among KBRA-rated CMBS.

During April, the delinquency rate for KBRA-rated U.S. CMBS increased moderately to 4.67%, representing a 17 basis points (bps) uptick from March. However, the distress rate, encompassing both delinquent and specially serviced loans, experienced a more significant rise of 79 bps to 8.29%. This increase in distress rate was primarily driven by the multifamily sector, which saw two loans totaling over $1.5 billion transferred to special servicing. Additionally, retail and mixed-use sectors also saw notable increases in distress rates of 79 bps and 76 bps, respectively.

The rise in distress rates was influenced by CMBS loans totaling $3.3 billion, with 35.8% ($1.2 billion) attributed to imminent or actual maturity default. Multifamily loans represented the largest portion (44.3%, $1.5 billion) of newly distressed loans, followed by office and retail sectors at 26.8% ($886.1 million) and 19.2% ($634.7 million), respectively.

Key Observations from the April 2024 Performance Data:

  • Delinquency rate increased to 4.67% ($13.9 billion) from 4.5% ($13.4 billion) in March.
  • Distress rate rose to 8.29% from 7.5% in March.
  • Multifamily sector witnessed a significant distress rate increase of 429 bps due to the transfer of Parkmerced and Hatteras Multifamily Portfolio loans.
  • Retail sector saw notable distress rate increases, with properties like Yorktown Center and Providence Place Mall being transferred to special servicing.
  • Mixed-use and office sectors also experienced distress rate climbs, driven by newly specially serviced or delinquent loans.

In its report, KBRA offers insights across its rated universe of U.S. private label CMBS, covering conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

Click here to access the full report.

About KBRA:

KBRA is a fully accredited credit rating agency providing comprehensive ratings for structured finance products. With registrations in the U.S., EU, UK, and Canada, KBRA’s ratings are widely recognized and utilized by investors for regulatory capital purposes across multiple jurisdictions.

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