KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the October 2022 servicer reporting period. The delinquency rate among KBRA-rated U.S. commercial mortgage-backed securities (CMBS) notched up a modest 2 basis points (bps) in October to 2.78% and has remained relatively unchanged from the rate recorded in August 2022. In this report, KBRA provides observations across our $319.2 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower (SASB), and large loan (LL) transactions.

In last month’s report we noted the continued growth in the population of specially serviced office loans, while this month marked the first time the conduit special servicing balance posted a monthly increase since April 2021. Retail, office, and industrial served as the main drivers of the monthly growth and altogether added roughly $349.5 million to the special servicing total among KBRA- rated transactions. Several larger-balanced retail loans, including the $195 million Valencia Town Center (UBSBB 2013-C5) and $48.1 million Rogue Valley Mall (WFRBS 2012-C10), were transferred to the special server this month due to their near-term maturity dates. In addition, a relatively new 2020 vintage industrial loan, the $50.8 million Supor Industrial Park (WFCM 2020-C56), was also transferred to the special servicer for payment default.

Looking at the combined percentage of delinquent and/or specially serviced loans, the overall rate dropped 14 bps to 4.45% from last month. There was a significant reduction in the rate for retail (8.19%) and mixed-use (5.66%), which logged a 40-bp and 64-bp decline, respectively, in part due to two SASB loans returning to the master servicer after the completion of maturity extensions.

Click here to view the report.

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About KBRA

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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