While the delinquency rate remained stable, there were significant differences in the types of properties. Loans backed by office property led the increase, up to 4% from just 2.7% on a quarterly basis. Retail loans followed, up three basis points, to 4.9%. Meanwhile, the housing delinquency balance and industrial loans fell three basis points to 5.3% and one basis point to 0.8%, respectively. The multi-family loan delinquency rate did not move in the second quarter at 0.7%. “Delinquency rates remain higher for housing and retail loans, which have improved significantly but remain high as a result of pandemic-related impacts,” Jamie Woodwell, head of commercial real estate research at MBA, explained in the report. “Not unexpectedly, delinquencies among office loan-backed mortgages led to the overall increase in the quarter – the delinquency rate increased by 130 basis points from 2.7% to 4%. By comparison, retail delinquency rates increased by 30 basis points, multifamily loan delinquency rates remained unchanged, and delinquency rates decreased in the industrial and residential sectors.” Among sources of capital, CMBS loan delinquencies posted the largest increase of eight basis points to 4.1%. On the other hand, noncurrent rates for other sources of capital remained more moderate, with the FHA’s healthcare and multiple-family loans lagging at 0.8%, life insurance corporate loans at 0.4%, and GSE loan balances at 0.3%. Read Next: Blackstone Sees Opportunities in Turbulent Commercial Real Estate Market Recent fluctuations in interest rates, uncertainty about real estate values, and questions about some property fundamentals have led to a deadlock in parts of the bargain and mortgage markets. “As loans mature, owners, lenders and others will work to determine the best path forward for each asset — which can help begin to break that deadlock.”
