KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the May 2023 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) rose 52 basis points (bps) in May to 3.47%. This is one of the largest monthly increases since its last peak in June 2020.

The magnitude and composition of newly delinquent loans this month are a clear indication of the stress being felt across the CMBS and broader commercial real estate market. These loans totaled $2.7 billion for the May reporting period, which contrasts with recent months where newly delinquent loans were generally $1 billion or less. Special servicing transfers for the reporting period were also relatively high, totaling $1.7 billion, the majority of which (61.3%) were attributed to imminent or actual maturity default. Office accounted for 69% ($1.8 billion) and 88.9% ($1.5 billion) of the balance of newly delinquent loans and newly specially serviced loans this month, respectively.

The newly delinquent office loans this month include $782.8 million 375 Park Avenue (CGCMT 2013-375, COMM 2013-CCRE8), $350 million ADV Portfolio (CSMC 2021-ADV), and $275 million EYP Plaza (BFLD 2020-EYP). The newly specially serviced office loans include $309.8 million River North Point (GSMS 2018-RIVR) and $232.5 million Aspiria Office Campus (JPMCC 2021-BOLT).

In this report, KBRA provides observations across our $315 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

Click here to view the report.

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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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