CMBS Distress Rate Dips 20 Basis Points, While Delinquencies Rise
The commercial mortgage-backed securities (CMBS) distress rate fell 20 basis points (bps) in June, according to CRED iQ’s latest analysis. While a modest drop from the May data, it represents the fourth distress rate reduction in the past five months.
The underlying metrics also saw decreases. Our delinquency rate was reduced by 30 bps to 8.1 percent, and our special service rate trimmed 10 bps to 10.1 percent.
CRED iQ’s distress rate, a composite metric capturing loans 30-plus days delinquent (or worse) and those in special servicing, came in at 10.8 percent in the latest reporting period after that 20 bps drop.
This follows May’s 70 bp increase, which snapped a three-month trend of distress rate reductions.
The CRED iQ research team analyzed the payment status of approximately $58 billion in distressed CMBS loans. The core objective of our research was to achieve a clear view of the current state of payment status reasons and associated near-term trending.
Our team then explored each payment status reason from a historical perspective. We wanted to understand the trending/evolution of each category dating back to February 2024. Our team built a heat map that reveals trends for each category.
The data showed that $9.4 billion in loans, or 16.2 percent of all CMBS loans, were current in June, down by $1 billion from the May print (17.9 percent current).
More than a quarter (28.3 percent), or $16.5 billion worth of loans, were delinquent, including those within grace periods, up from $14.7 billion (25.3 percent) delinquent in May.
CMBS loans that have passed their maturity date numbered $32.4 billion in June, largely flat from the previous month. Of these loans, 18.5 percent are performing (up from 18.1 percent), while 37 percent are nonperforming (down from 38.6 percent).
Loan highlight
The $463 million 5 Bryant Park loan, backed by a 682,988-square-foot office property in Manhattan’s Times Square South market, failed to pay off at the adjusted June 2025 maturity. Originally slated to mature in June 2020, closing documents indicate the loan was subject to five 12-month extension options.
The borrower has exercised all five extension periods. Year-end 2024 financials reported a debt service coverage ratio of 0.83 and occupancy of 81 percent.
Mike Haas is the founder and CEO of CRED iQ.
