According to the Mortgage Bankers Association's latest commercial real estate finance Loan Performance Survey, U.S. delinquency rates for mortgages backed by commercial and multifamily properties increased during the third quarter of 2023.
"The delinquency rate for loans backed by commercial properties has now increased for four consecutive quarters," said Jamie Woodwell, MBA's Head of Commercial Real Estate Research. "The delinquency rate for loans backed by office properties now exceeds those of loans backed by retail and hotel properties, while the delinquency rates for multifamily and industrial property loans remain below one percent."
Woodwell continued, "Commercial property markets are working through challenges stemming from uncertainty about some properties' fundamentals, a lack of transparency into where current property values are, and higher and volatile interest rates. The result has been a slow and steady uptick in delinquency rates, concentrated among loans facing more of those challenges."
Commercial Mortgage Market Highlights for Q3, 2023