KBRA Releases Research – CMBS Loan Performance Trends: March 2021 Update
NEW YORK–(COMMERCIAL THREAD) – Kroll Bond Rating Agency (KBRA) publishes a report on the performance trends of commercial mortgage-backed securities (CMBS) lending in the United States observed during the service reference period of March 2021. The March’s delinquency rate remained at 5.9% compared to February.
It was a mixed performance by type of property. In March, the housing delinquency rate increased to 17.2% against 16.7% the previous month. However, the rate of default and special services among home loans actually declined to 21.6% from 21.9%. Multifamily and office also saw increases in their delinquency rate, to 3.3% from 2.2% and 1.5% from 1.3%, respectively. The increases were driven by a few larger, newly delinquent loans in New York City. Among other types of real estate, retail posted the largest drop in the default rate, which fell 60 basis points (bps) to 8.1%.
In the report, we also provide the conduit delinquency rate by property type for major metropolitan statistical areas (MSA) and compare these numbers with the rates released six months ago. The overall duct failure rate has fallen 80 basis points to 7.1% in the past six months. However, not all MSAs tended to decline, with New York and Chicago recording the largest increase in their delinquency rates (150bp to 9.6% and 120bp to 12.1%, respectively). Atlanta and Miami are doing better, recording the greatest improvement in their delinquency rates (240 bps at 5.5% and 180 bps at 8.7%). In addition, a breakdown by property type showed two notable changes in the accommodation delinquency rate: New York (increasing to 44% from 23.8%) and Atlanta (down to 13.7% from 25. 5%) during the six-month period.
Click on here to view the report.
KBRA is a full service credit rating agency registered in the US, EU and UK, and is designated to provide structured finance ratings in Canada. KBRA ratings may be used by investors for regulatory capital purposes in several jurisdictions.