The CRED iQ overall delinquency rate for CMBS continued its downward trend this month with a sharp decline, representing the 21st consecutive month-over-month improvement. The delinquency rate, equal to the percentage of all delinquent specially serviced loans and delinquent non-specially serviced loans, for CRED iQ’s sample universe of $500+ billion in CMBS conduit and single-asset single-borrower (SASB) loans was 4.02%, which compares to the prior month’s rate of 4.32%. CRED iQ’s special servicing rate, equal to the percentage of CMBS loans that are with the special servicer (delinquent and non-delinquent), declined month-over-month to 6.43% from 6.91%.
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Aggregating the two indicators of distress – delinquency rate and special servicing rate – into an overall distressed rate (DQ + SS%) equals 6.60% of CMBS loans that are specially serviced, delinquent, or a combination of both. The overall distressed rate declined compared to the prior month rate of 6.87%. The overall distressed rates typically track slightly higher than special servicing rates as most delinquent loans are also with the special servicer.
One of the more notable new delinquencies this month was the $425 million Woodlands Mall loan, which is secured by a 758,231-sf regional mall in The Woodlands, TX. Additionally, the $77.1 million Bellis Fair Mall loan, secured by a 538,226-sf regional mall in Bellingham, WA, failed to pay off at maturity. The maturity default was likely anticipated by market constituents given the loan’s debt service coverage ratio (DSCR) of 1.06 based on net cash flow through the first nine months of 2021 coupled with sub-optimal collateral occupancy of 80%.
Two of the largest loans to transfer to special servicing this month were secured by office properties — the $46.7 million Princeton South Corporate Center loan, secured by 267,426-sf office property in Ewing, NJ, and the $36.6 million 55 Green Street loan, secured by a 54,414-sf office building located in San Francisco’s Financial District.
About CRED iQ
CRED iQ is a commercial real estate data, analytics, and valuation platform providing actionable intelligence to CRE and capital markets investors. Our data platform is powered by over $2.0 trillion of CMBS, CRE CLO, and GSE/Agency loan and property data.