A significant December spike in office sector CMBS delinquencies shows the sector is still reeling from the ongoing impacts of the COVID-19 pandemic, according to new analysis from Trepp.
Trepp's overall CMBS delinquency rate increased last month for the first time in 18 months, with the office CMBS delinquency rate rising 72 basis points over the previous month to 2.53%. That's the largest single month-over-month increase in office delinquencies since 2017, when the rate increased by over 50 points twice, Trepp's Jack Forge says.
The firm is currently tracking nearly $131 billion in interest-only office loans, citing parallels to mall property interest-only loans in the retail sector. In a recent report, Trepp examined the parallels between maturing loans in each sector and questioned whether office could see the same fate as retail.
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