Office CMBS Delinquencies Surpass 10% in November

Soured office loans drove a 7.36% increase in CMBS delinquencies during November, Trepp reported. The U.S. CMBS delinquency rate rose 42 basis points overall to 6.4%, compared to 4.58% a year ago.

Office delinquencies rose about 100 bps in November to 10.38%. Multiple large newly delinquent office loans drove the office delinquency rate higher, with office comprising 60% of the net change in delinquent Loan amount last month, reported Trepp.

The month’s largest new delinquency was a $370-million floating rate loan backed by the 1.16-million-square-foot AMA Plaza in Chicago. Although the property’s office component remains well-leased, the snag is that the loan carries a floating coupon with SOFR now considerably higher than in 2021, when the latest loan against the AMA Plaza was originated.

Multifamily and lodging delinquencies posted monthly increases of 94 and 83 bps, respectively, although the sectors’ CMBS delinquency rates remain considerably lower than that of office.

Pictured: AMA Plaza at 330 N. Wabash in Chicago. Photo courtesy of Beacon Capital Partners.