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CMBS distress hits 11.6% in top US metros as office woes shift
Commercial Observer, citing CRED iQ, says office still accounts for 16.7% of cumulative CMBS distress, or $22.5 billion, about half of the distressed balance.
Across the 50 largest commercial mortgage backed securities, or CMBS, markets in the United States, $45.8 billion of $393.5 billion in outstanding balance is currently distressed, for a balance weighted rate of 11.6 percent, according to CRED iQ data cited by Commercial Observer.
The most distressed metros are Minneapolis, Denver and Oklahoma City, at 55.1 percent, 35.9 percent and 34.1 percent, respectively. Salt Lake City is at zero, making it the cleanest metro among the top 50, while Phoenix, Boston, Las Vegas and Orlando sit around 3 percent.
The driver of distress is changing by property type, Commercial Observer reports. Multifamily distress has more than doubled since February, rising from 6 percent to 13 percent, while office distress has eased from 21.2 percent to 16.7 percent, even as office remains the largest source of cumulative distress at 16.7 percent, or $22.5 billion, roughly half of all distressed balance nationally.
In July, 180 loans totaling $992 million became newly distressed, with about 96 percent of that amount tied to multifamily loans, led by an $84 million Houston apartment loan. Since February, Denver’s distress jumped 13.5 points from 22.4 percent to 35.9 percent due to two large office defaults, according to the report.