NEW YORK--()--KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the January 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS in January increased to 6.77%, up 27 basis points (bps) from December’s 6.5%. The total delinquent plus current but specially serviced loan rate (collectively, the distress rate) increased 34 bps to 9.67%. Notably, this month saw a relatively high volume of specially serviced loans, totaling 828.4 million across 28 loans, that were repaid or disposed of. This compares to a monthly average in 2024 of $229.7 million and 10 loans.

In January, CMBS loans totaling $2.5 billion (similar to the prior month) were newly added to the distress rate, of which 61.5% ($1.5 billion) were for imminent or actual maturity default. The mixed-use sector experienced the highest volume of newly distressed loans (39.1%, $972 million), followed by office (27.7%, $689.9 million), retail (11.1%, $276.4 million), and multifamily (8.9%, $222.1 million).

Key observations of the January 2025 performance data are as follows:

  • The delinquency rate increased to 6.77% ($21.5 billion), from 6.5% ($20.8 billion) in December.
  • The distress rate ticked up 34 bps to 9.67% ($30.8 billion), from 9.33% ($29.8 billion) last month.
  • The office distress rate climbed 46 bps, crossing the 15% mark. Seventeen office loans became newly distressed, the largest of which were The Club Row Building ($155 million in two conduits) and Apollo Education Group HQ Campus ($91.5 million in three conduits).
  • Mixed-use saw the largest increase in its distress rate this month, jumping 201 bps. The primary drivers were the Stonemont Portfolio loan ($664.7 million, three conduits and one single-asset single borrower (SASB)), which transferred to the special servicer for imminent monetary default, and the Prime Storage Fund II loan ($340 million, CGCMT 2021-PRM2), which became specially serviced and nonperforming matured balloon.
  • As mentioned, January saw a comparatively high volume of loan resolutions. The 28 disposed loans totaling $828.4 million comprised 16 loans totaling $595.1 million that incurred no loss, and 12 loans totaling $233.3 million that had an average loss severity of 61.4%.

In this report, KBRA provides observations across our $330.9 billion rated universe of U.S. private label CMBS including conduits, SASB, and large loan (LL) transactions.

Click here to view the report.

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