Four commercial property sectors saw monthly fluctuations in their CMBS delinquency rates of 40 basis points or more in December 2024, Trepp reported this week. Lodging delinquencies declined 78 bps to 6.14%, but the other three property types saw increases in December.

Retail delinquencies rose the most, climbing 86 bps to 7.43%. The office delinquency rate increased by 63 bps to an all-time high of 11.01%, while the multifamily rate grew by 40 bps to 4.58%. Industrial delinquencies dropped three bps to 0.29%.

The largest new retail delinquency in December was the $505-million loan on Natick Mall, a 1,039,965- square-foot superregional mall in the Boston suburb of Natick, MA. “Updated special servicer commentary highlights that the borrower believes the mall is not financeable at this time due to debt service and debt yield levels being below market, co-tenancy concerns and the status of the anchor boxes,” according to Trepp.

In office, the largest new delinquency was the $670-million 230 Park Ave. loan, backed by the Helmsley Building in Midtown Manhattan (pictured). Trepp noted that the loan had toggled between performing and nonperforming matured balloon throughout 2024 and was performing from July to November, but December commentary revealed that the special servicer commenced a foreclosure action.

Fitch Ratings’ overall U.S. CMBS delinquency rate climbed 22 basis points to close 2024 at 2.98%, up from 2.76% in November and 2.31% a year ago. The increase was fueled by a surge in office delinquencies and reduced resolution volume.

Five large office loans with a balance greater than $60 million became newly delinquent in December, totaling $1.03 billion and accounting for 50% of overall new delinquencies and 81% of new office delinquencies. These were largely responsible for a 92-bp increase in office CMBS delinquencies, which ended 2024 at 7.18%.

New 60+ day delinquency volume increased to $2.08 billion in December 2024 from $1.76 billion in November, driven mainly by several larger balance office loans. Office loans accounted for the largest share of new delinquencies (61%, $1.27 billion) followed by retail (15%, $309 million), mixed use (12%, $258 million) and multifamily (5%, $92 million). Term defaults accounted for 51% ($1.06 billion) of new delinquencies, while maturity defaults represented 49% ($1.02 billion).

Resolution volume decreased to $586 million in December from $1.48 billion in November, below the year’s monthly average of $1.05 billion.

Pictured: Worldwide Plaza in New York City, which backs one of five newly delinquent large office loans.

Large-scale loans helped drive significant credit changes in newly delinquent loans, cured loans and modified loans during July, Trepp reported. For example, the office CMBS delinquency rate rose 54 basis points last month to 8.09%, with a single loan–the $670-million securitization on 230 Park Ave. in Midtown Manhattan–representing about one-third of new delinquencies in the sector.

In the multifamily sector, several large loans also became delinquent or reverted to delinquency during July, according to Trepp. One of these was the $221-million MFP portfolio, which became nonperforming last November, returned to performing status in April and then flipped back last month. Multifamily delinquencies rose 27 bps to 2.63% as July ended.

Conversely, the $124.2-million Gansevoort Park Avenue loan backed by a Manhattan lodging property was sent to the special servicer in June for imminent monetary default but then turned back to performing matured balloon in July, taking the loan out of the pool of delinquent CMBS deals. This helped drive a 15-bp decrease in hotel delinquencies to 6.17%. Retail delinquencies also declined in July, dropping by 28 bps to 6.14%.

Lee & Associates has negotiated a new 444,600-square foot, long-term lease for John B. Sanfilippo & Son, Inc. (JBSS) at Venture Park 47, 12300 Jim Dhamer Drive, in Huntley, Illinois. This transaction marks the largest industrial lease of the second quarter in Chicago’s North Kane County submarket, and the fourth largest in the Chicago metropolitan area.

Frank Griffin and John Sharpe, SIOR, CCIM, LEED-AP, both principals at Lee & Associates’ Illinois office, represented the tenant, who has begun occupying the facility concurrently with tenant improvement buildout. Brian Kling and Reed Adler of Colliers represented the owner, Venture One Real Estate.

“JBSS’ recent acquisition of TreeHouse Foods’ snack bars business created a two-state search for an expansion requirement,” said Griffin. “The combination of economics and logistical needs resulted in JBSS adding the Huntley building to their real estate portfolio.” 12300 Jim Dhamer Drive is a 729,823-square-foot building completed in 2023.