Office CMBS delinquency climbs to 12.33% in October

Office CMBS delinquencies rose 17 basis points to 12.33% in October, the highest of Trepp's five major property types. The overall rate fell 15 basis points to 7.87% on a single $975 million loan cure, according to Trepp's monthly reading as reported by Connect CRE.

Retail posted the largest increase, up 63 basis points to 7.21%, while multifamily added five basis points to 8.09%. Lodging fell 24 basis points to 5.94% and industrial four basis points to 1.10%. As Private Wealth Daily previously reported, the single cure drove the improvement.

For an allocator pricing conduit CMBS, the two numbers to hold together are 7.87% and 12.33%. Office delinquency now runs more than 11 times industrial's 1.10% and about 1.5 times multifamily's 8.09%. A buyer comparing pools on the 7.87% headline is pricing the cure.

Office led the month's new delinquencies, including a $384.3 million Los Angeles office loan and a $210 million San Francisco Bay Area apartment loan. The five biggest newly delinquent loans also included office towers in Chicago, Los Angeles and Washington, DC; an office portfolio spanning Washington, DC, and Northern Virginia; and a New Orleans hotel.

Those loans are large-balance assets in major metros, so the office distress in this reading was concentrated in larger properties. Office now sits 4.46 percentage points above the 7.87% headline rate.