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KBRA Releases Research – CMBS Loan Performance Trends: February 2025

Published 4 days ago via Business Wire

KBRA releases a report on U.S. commercial mortgage-backed securities (CMBS) loan performance trends observed in the February 2025 servicer reporting period. The delinquency rate among KBRA-rated U.S. private label CMBS in February decreased 16 basis points (bps) to 6.61% from 6.77% in January. The total delinquent plus current but specially serviced loan rate (collectively, the distress rate) decreased 14 bps to 9.53%. However, the multifamily delinquency rate jumped 118 bps, mainly due to two loans, 180 Water ($265 million in three conduits) and Park West Village ($254 million in six conduits). Additionally, seven other multifamily loans totaling $89.1 million also became delinquent.

In February, CMBS loans totaling $1.7 billion—a significantly lower total than in previous months—were newly added to the distress rate, of which 20% ($329.3 million) were for imminent or actual maturity default. The office sector experienced the highest volume of newly distressed loans (41.8%, $691.1 million), followed by retail (22.4%, $370.4 million), and multifamily (17.2%, $284.1 million).

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

  • The delinquency rate decreased to 6.61% ($21.6 billion), from 6.77% ($21.5 billion) in January.
  • The distress rate fell 14 bps to 9.53% ($31.2 billion), from 9.67% ($30.8 billion) last month.
  • The office distress rate held mostly steady this month at 15.2%, after experiencing an average increase of 36 bps for the past three months.
  • The mixed-use delinquency rate dropped 245 bps, primarily driven by Prime Storage Fund II ($340 million in CGCMT 2021-PRM2) flipping to performing after being reported as non-performing matured balloon last month; it remains in special servicing. The sector also saw seven loans totaling $265.7 million becoming current, of which four loans ($210.1 million) remain with the special servicer.
  • Multifamily experienced a 118-bp jump in delinquency, mainly driven by 180 Water ($265 million in three conduits) and Park West Village ($254 million in six conduits) missing their February payments—180 Water became non-performing matured balloon (November 2024 maturity), while Park West Village became 30-59 days delinquent. Further, seven smaller loans (totaling $89.1 million) became delinquent.

In this report, KBRA provides observations across our $339.4 billion rated universe of U.S. private label CMBS including conduits, single-asset single borrower and large loan transactions.

Click here to view the report.

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KBRA, one of the major credit rating agencies, is registered in the U.S., EU, and the UK. KBRA is recognized as a Qualified Rating Agency in Taiwan, and is also a Designated Rating Organization for structured finance ratings in Canada. As a full-service credit rating agency, investors can use KBRA ratings for regulatory capital purposes in multiple jurisdictions.

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