For years, big CRE loans seemed to be safer. That may no longer be the case.
Trepp noted in a new report that the commercial mortgage-backed security (CMBS) delinquency rate has been on a big upswing — 51 basis points to 4.41% in July 2023. Office is the biggest problem, though retail is also at issue as valuation drops have become massive.
"The office delinquency rate has risen 338 basis points since December of last year and is the highest it has been since May 2018," Jack LaForge wrote for Trepp. "Office vacancies are rising as firms adjust to a hybrid work environment, and property financial performance is suffering. It is easy to cast generalizations about the sector, but not every office loan is the same."
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