Overall delinquency continued its decline for the sixth consecutive reporting period following its rapid ascent from April to June 2020. Although there has been a favorable trend, defaults on CRE mortgages remain at an elevated level across the United States. Despite Congress passing a $900 billion COVID relief bill, and initial COVID vaccination efforts, the benefits of these measures won’t immediately be evident for the majority of distressed commercial properties. As a result, we expect delinquencies will remain elevated for much of 2021.
CRED iQ monitors market performance for nearly 400 MSAs across the United States. Below is a summary of the default rates for the 50 largest metros segmented by property type. Consistent with the months following the start of the pandemic, the hotel and retail sectors remain the largest contributors to the delinquency percentages for the majority of these statistical areas. Loans backed by self-storage, multifamily, and industrial facilities posted the lowest delinquency rates for most of these markets.
Among the markets with the largest spikes in delinquency for this reporting period is Cincinnati. Contributing to the overall default rate for this metro is the 212-key, Cincinnati Eastgate Holiday Inn. The full-service hotel was built in 1983 and renovated in 2010. According to the servicer, the loan defaulted in June 2020 and is heading for foreclosure. For more information on this property, please visit cred-iq.com.
For the full January 2021 Delinquency Report, download here:
CRED iQ will continue to track developments by market across the nearly 400 MSAs under coverage. Please visit cred-iq.com for periodic updates and to identify lending, leasing, distressed debt or acquisition opportunities within these markets.