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<\/figure><\/div>\n\n\n\nSegment Review<\/strong><\/p>\n\n\n\n Multifamily continued its momentum rising to 11.0% from last month\u2019s 8.4%, a dramatic 260 basis point increase in one month. Just eight months ago, that rate was 2.6%. The multifamily segment surpassed retail to secure the second highest level of distress among all CRE segments. These figures include all multifamily securitized with CMBS financing.<\/p>\n\n\n\n The office segment saw an increase in its distress rate in August\u2013adding 80 basis points to 13.0% while maintaining its leadership as the sector with the highest overall distress level.<\/p>\n\n\n\n Retail improved by reducing its distress rate from 11.8% to 10.6% in this print\u2014settling in at third place. The hotel segment added 60 basis points to 8.4%.<\/p>\n\n\n\n Uncharacteristically, the industrial segment saw a sharp increase from 0.8% to 4.6%–the largest increase of all property types.\u00a0 This increase is largely attributable to one SBLL portfolio valued at $2.18 billion (please see \u201cLoan Highlight\u201d below).\u00a0\u00a0 Meanwhile, self-storage continued to perform with nearly zero distress \u2013 coming in at 0.1%.<\/p>\n\n\n\n Payment Status<\/strong><\/p>\n\n\n\n Looking at distressed loan payment status, 31.7% of the loans are current \u2013 up significantly from last month\u2019s 21.2%. 2.1% of loans are attributable to late (but in the grace period) and 3.6% of loans were late (but less than 30 days DQ). Combining these three metrics 37.4% of all loans were current \/ late within the grace period \/ less than 30 days delinquent. <\/p>\n\n\n\n Non-Performing Matured saw a reduction from 39.0% to 30.9%, as did 90+ Days Delinquent dropping from 14.2% to 10.9%. Performing Matured increased from 12.9% in July to 16.2% in August.<\/p>\n\n\n\n Analysis Methodology<\/strong><\/p>\n\n\n\n CRED iQ\u2019s distress rate aggregates the two indicators of distress \u2013 delinquency rate and specially serviced rate \u2013 yielding the distress rate. The index includes any loan with a payment status of 30+ days delinquent or worse, any loan actively with the special servicer, and includes non-performing and performing loans that have failed to pay off at maturity.<\/p>\n\n\n\n It\u2019s important to note that CRED iQ\u2019s distress rate factors in all CMBS properties that are securitized in conduits and single-borrower large loan deal types. CRED iQ tracks Freddie Mac, Fannie Mae, Ginnie Mae, and CRE CLO loan metrics in separate analyses.<\/p>\n\n\n\n As mentioned in our August report, our analysis exposes a meaningful gap between the distress and watchlist rates which could imply that the special serving & delinquency percentages may be likely to grow.\u00a0<\/p>\n\n\n\n Loan Highlight<\/strong><\/p>\n\n\n\n Nvip 1-15, a $2.18 billion ($133\/SF) SBLL loan backed by a 138 industrial and office\/flex property portfolio, defaulted this month after failing to payoff at maturity. The interest-only loan also has $1.96 billion ($119\/SF) in additional debt. The loan has three, one-year maturity extension options representing a fully extended maturity of August 2027. Servicer commentary indicates the borrower provided written notice to exercise the first maturity extension option.<\/p>\n\n\n\n The 16.4 million SF portfolio consists of properties throughout six states: CA, FL, VA, TX, MD, and WA. The portfolio was 98.5% occupied and performing with a DSCR of 0.73. The collateral was valued at $4.2 billion ($256\/SF) at underwriting in June 2022.<\/p>\n\n\n\n![\"\"](\"https:\/\/cred-iq.com\/blog\/wp-content\/uploads\/2024\/09\/CRED-iQ-CMBS-August-Overall-Distress-Rates-by-Property-Type-1.png\")
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