The Mortgage Bankers Association’s (MBA) Commercial Real Estate Finance (CREF) loan performance survey showed commercial and multifamily mortgage delinquencies held steady for June.
“Commercial and multifamily mortgage delinquencies continue to be driven by loans backed by hotel and retail properties that ran into trouble during the pandemic and are now more than 90 days late,” Jamie Woodwell, MBA vice president of commercial real estate research, said in a release. “We expect these late-stage delinquencies to wane as the economy continues to open and there is less uncertainty surrounding the prospects of these and many other property types.”
The balance of non-current commercial and multifamily mortgages shifted only slightly from May to June. Current outstanding loan balances were unchanged at 95.2 percent. Mortgages more than 90 days delinquent, or in Real Estate Owned (REO) were at 3 percent, down from 3.1 percent in May; 60-90 days delinquent were at 0.2 percent, unchanged month-over-month; 30-60 days delinquent were 0.6 percent, up from 0.5 percent; and less than 30 days delinquent were at 1.1 percent, up from 1 percent.
Lodging and retail properties continue to see the greatest stress, the MBA stated, but loans backed by lodging saw a noticeable improvement in June. The balance of delinquent lodging loans was at 17.6 percent, down from 20 percent a month earlier and delinquent retail loan balance was at 10 percent, up from 9.5 percent.
Non-current rates for other property types were 3.1 percent for industrial property loans, up from 1.9 percent; 3.5 percent for office property loans, up from 2.4 percent; and 2.1 percent of multifamily balances, up from 1.8 percent.
Commercial mortgage-backed securities (CMBS) loan delinquency rates were higher than other capital sources because of the concentration of hotel and retail loans, but were slightly down month-over-month (8.1 percent, down from 8.2 percent). Non-current rates for other capital sources were more moderate: Federal Housing Administration multifamily and health care loan delinquency balances were 2.7 percent, up from 2.4 percent; life company loan delinquency balances were 3.2 percent, up from 2 percent from a month earlier; and government sponsored enterprise loan delinquency balances were 1 percent, down from 1.2 percent.