{"id":2858,"date":"2023-01-04T19:17:44","date_gmt":"2023-01-04T19:17:44","guid":{"rendered":"https:\/\/cred-iq.com\/blog\/?p=2858"},"modified":"2023-01-04T19:17:44","modified_gmt":"2023-01-04T19:17:44","slug":"market-delinquency-tracker-december-2022","status":"publish","type":"post","link":"https:\/\/cred-iq.com\/blog\/2023\/01\/04\/market-delinquency-tracker-december-2022\/","title":{"rendered":"Market Delinquency Tracker – December 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 December 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<\/a>, half exhibited month-over-month increases in the percentage of distressed CRE loans with an average monthly increase of 0.7%. The other half of the 50 largest MSAs had an average improvement in distress of 0.2%. Notable markets with increased levels of distress this month included Pittsburgh<\/strong> (+4.0%), Birmingham, AL<\/strong> (+2.4%), and Cleveland<\/strong> (+1.9%). The Memphis, TN<\/strong> market (-0.5%) exhibited the sharpest percentage decline in distressed commercial real estate loans during December 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. The office sector accounted for three of the five-largest month-over-month increases in distress by market-sector. Multiple large-balance office loans transferred to special servicing in December 2022, including a $243.6 million mortgage secured by Republic Plaza<\/a> in Denver, CO<\/strong>, a $53.9 million mortgage secured by Belk Headquarters<\/a> in Charlotte, NC<\/strong>, and a $41.7 million mortgage secured by Parkway Center<\/a> in Pittsburgh, PA<\/strong>. As noted, the Pittsburgh MSA exhibited the highest increase in distress this month among primary markets. Much of the increase in distress can be attributed to a $98.2 million loan secured by a 1.5 million-sf mixed-use (office and retail) building located at 3 Gateway Center<\/a>. The loan transferred to special servicing in late-November 2022 ahead of its January 2023 maturity date. Imminent maturity default was cited as the reason for distress. The office tower, which has a retail component, has had issues attaining occupancy levels above 80% for several years.<\/p>\n\n\n\n

The lodging sector was associated with five of the 10 largest percentage declines in distressed rates across market-sectors during December 2022, including the Chicago<\/strong> hotel market-sector (-1.7%). A $20.7 million loan secured by the IHG-flagged EVEN Hotel Chicago \u2013 Tinley Park<\/a> returned to the master servicer this month after initially transferring to special servicing in October 2021.<\/p>\n\n\n\n

The Minneapolis<\/strong> MSA has the highest overall distressed rate at 20.3%, which was in line with previous months. Birmingham<\/strong> (11.0%), Cleveland<\/strong> (10.3%), Hartford<\/strong> (9.0%), and Milwaukee<\/strong> (8.6%) comprise the remaining markets with the highest rates of distress. The Sacramento<\/strong> MSA (0.1%) displaced Jacksonville<\/strong> this month as the market with the lowest percentage of distress among the Top 50 MSAs after favorable workouts in the retail and lodging sectors.<\/p>\n\n\n\n

For the full Market Deli<\/strong>nQ<\/strong>uency Tracker Report, download here:<\/p>\n\n\n\n