KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the January 2023 servicer reporting period. The delinquency rate among KBRA-rated U.S. CMBS started off the year generally flat compared to the close of 2022, posting a modest decline of 3 basis points (bps) month-over-month to 2.94%, following a 21-bp increase between October and December.

In addition to delinquencies, loans that have failed to pay off at maturity or at risk of not paying off continue to comprise the overwhelming bulk of recent special servicing transfers. A total of $595 million in CMBS loans were newly sent to special servicing this reporting period, of which $302.5 million (69.1%) were flagged as having transferred due to imminent or actual maturity default—a similar rate to the last two months.

In this report, KBRA provides observations across our $316.6 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

Other key observations of the January 2023 performance data are as follows:

• Following a 21-bp increase between October and December, delinquencies held steady at 2.94% in January ($9.3 billion), down slightly from 2.97% last month ($9.48 billion). This is down from 3.66% a year ago but is largely flat from a rate of 2.91% recorded six months ago.
• Roughly $1.1 billion in CMBS loans were newly categorized as delinquent this month, of which 56% were reported as nonperforming matured balloons. This was offset by about $953.2 million in loans that reverted to current and another $205.3 million in previously delinquent loans that paid off. The largest loans that were added to the delinquency status this month include the $195 million Valencia Town Center in Valencia, California (UBSBB 2013-C5) and the $161.5 million West Town Center in Des Peres, Missouri (JPMCC 2014-C10 and JPMCC 2012-LC9), both of which did not pay off at their recent maturity dates. By comparison, November and December each saw about $1.3 billion in new delinquencies, of which more than 50% and 75% were reported as nonperforming past maturity, respectively.
• Among the largest imminent or actual maturity defaults include the $159.9 million 301 South College Street (WFRBS 2013-C14 and WFRBS 2012-C13) and $120 million Charlotte Plaza (LSTAR 2016-4 and LSTAR 2017-5) loans. Both are secured by Class A office buildings located in the central business district of Charlotte, North Carolina.

Click here to view the report.

Related Publications

• CMBS Trend Watch: December 2022
• CMBS Loan Performance Trends: December 2022
• CMBS ARAs: Nearing an Inflection Point?
• KBRA CMBS Loss Compendium Update: December 2022
• Nearly 75% of SASB Rate Caps Below Prevailing Index Margin

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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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