{"id":2763,"date":"2022-11-04T14:13:21","date_gmt":"2022-11-04T14:13:21","guid":{"rendered":"https:\/\/cred-iq.com\/blog\/?p=2763"},"modified":"2022-11-04T14:13:21","modified_gmt":"2022-11-04T14:13:21","slug":"commercial-real-estate-market-delinquency-tracker-november-2022","status":"publish","type":"post","link":"https:\/\/cred-iq.com\/blog\/2022\/11\/04\/commercial-real-estate-market-delinquency-tracker-november-2022\/","title":{"rendered":"Market Delinquency Tracker – November 2022"},"content":{"rendered":"\n
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CRED iQ monitors distressed rates and market performance for nearly 400 MSAs across the United States, covering over $900 billion in outstanding commercial real estate (CRE) debt. Distressed rates (DQ + SS%) include loans that are specially serviced, delinquent, or a combination of both. Distressed rates and month-over-month changes for data reported as of October 2022 are presented below for the 50 largest MSAs, broken out by property type for a granular view of distress by market-sector.<\/p>\n\n\n\n

Of the 50 largest MSAs tracked by CRED iQ, there were 27 markets that exhibited month-over-month decreases in the percentage of distressed CRE loans within the CMBS universe. Total markets with month-over-month improvements in distressed rates outnumbered markets with distressed rate increases. Notable markets with improvements in distress included Portland, OR<\/strong> (-1.65%), Kansas City, MO<\/strong> (-1.23%), and Cleveland<\/strong> (-1.05%). The Richmond, VA<\/strong> market (+2.93%) exhibited the largest percentage increase in distressed commercial real estate loans during October 2022.<\/p>\n\n\n\n

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For a more granular analysis of the Top 50 markets, CRED iQ further delineated individual market distressed rates by property type for a comprehensive view by market-sector. In the case of higher CRE distress for in the Richmond<\/strong> market relative to last month, the adverse developments can be traced to the retail market. In particular, a $92.4 million mortgage secured by Chesterfield Towne Center<\/a> transferred to special servicing in September 2022 before it defaulted at maturity in October 2022. Collateral for the loan includes over 1 million sf of retail space between a regional mall and adjacent freestanding retail suites. The regional mall features traditional anchor boxes such as Macy\u2019s, JCPenney, and At Home, as well as a vacant former Sears. A maturity extension is a viable option for the loan, but conveyance of the property remains within the range of outcomes.<\/p>\n\n\n\n

The retail property type was associated with four of the 10 sharpest percentage increases in distressed rates across market-sectors during October 2022. In addition to Richmond<\/strong>, retail markets for Salt Lake City<\/strong> (+6.0%), Los Angeles<\/strong> (+3.9%), and New York City<\/strong> (3.4%) had percentage increases in distressed rates this month.<\/p>\n\n\n\n

Market-sectors with month-over-month improvements in distressed rates varied by property type. Hotel, Retail, Industrial, Mixed-Use, and Other\/Specialty Use were represented across Top 10 market-sector declines in distressed rates. The Virginia Beach<\/strong> industrial market (-8.0%) exhibited the highest percentage improvement compared to September 2022. A distressed workout of the Commonwealth Commerce Center<\/a>, a 703,170-sf industrial complex in Suffolk, VA. The REO property was liquidated and resolved $21.2 million in outstanding debt.<\/p>\n\n\n\n

The Minneapolis<\/strong> MSA has the highest overall distressed rate at 20.6%, which was in line with the previous month. Birmingham<\/strong> (9.6%), Cleveland<\/strong> (8.9%), Milwaukee<\/strong> (8.8%), and Hartford<\/strong> (8.3%) comprise the remaining markets with the highest rates of distress. Milwaukee<\/strong> was a new addition to the Top 5 distressed markets this month, displacing Portland<\/strong>. The Jacksonville<\/strong> market (0.1%) had the lowest percentage of distress among the Top 50 MSAs for the third consecutive month.<\/p>\n\n\n\n

For the full CRED DQ Report, download here:<\/p>\n\n\n\n