“Delinquency rates for commercial mortgages backed by office properties continued to increase during the third quarter but declined for loans backed by lodging, retail and industrial properties,” said Jamie Woodwell, head of commercial real estate research at MBA.
He emphasized that the commercial mortgage market is highly varied, with performance influenced by the different property types, geographic locations, and economic factors.
Office property loans experienced the most significant delinquency increase, with 7.8% of the total loan balance 30 or more days delinquent, up from 7.1% in the previous quarter. The office sector continues to face significant challenges, with rising vacancies and a slow return to office spaces creating financial strain for property owners.
In contrast, loans backed by lodging, retail, and industrial properties fared better in Q3. The delinquency rate for lodging loans decreased slightly to 5.6%, down from 5.8%. Retail property loans saw a more substantial improvement, with delinquencies falling to 3.8% from 4.5%. Industrial property loans continued to show resilience, with only 0.6% of loans in this sector delinquent, down from 0.8% in Q2.
Source: mpamag.com