{"id":4510,"date":"2025-03-06T18:04:59","date_gmt":"2025-03-06T18:04:59","guid":{"rendered":"https:\/\/cred-iq.com\/blog\/?p=4510"},"modified":"2025-03-06T18:05:00","modified_gmt":"2025-03-06T18:05:00","slug":"cred-iqs-overall-office-distress-climbs-to-19-3-while-the-overall-distress-rate-logs-its-first-decrease-in-five-months","status":"publish","type":"post","link":"https:\/\/cred-iq.com\/blog\/2025\/03\/06\/cred-iqs-overall-office-distress-climbs-to-19-3-while-the-overall-distress-rate-logs-its-first-decrease-in-five-months\/","title":{"rendered":"CRED iQ\u2019s Overall Office Distress Climbs to 19.3%, While the Overall Distress Rate Logs its First Decrease in Five Months"},"content":{"rendered":"\n

The CRED iQ research team evaluated payment statuses reported for each loan (securitized by CMBS financing), along with special servicing status as part of our monthly distress update.<\/p>\n\n\n\n

The CRED iQ overall distress rate fell by 70 basis points to 10.8%, breaking a streak of four record highs through last month\u2019s print.  CRED iQ\u2019s other distress metrics also notched month-over-month reductions.  The CRED iQ delinquency rate fell from from 8.9% in the January print to 8.0%.  The CRED iQ special serving rate shaved 20 points this month and now stands at 10.1%.  One year ago, delinquency and special servicing rates were 5.4% and 7.0% respectively.<\/p>\n\n\n

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Segment Review<\/strong><\/p>\n\n\n\n

The office sector nearly matched December\u2019s increase, which was the largest by far in 2024. Office missed that mark by only 10BP, tacking on 160 BP since last month to reach a record 19.3% distress rate. Office continues to bolster a commanding lead as the most distressed property type<\/p>\n\n\n\n

The multi-family segment\u2019s overall distress rate continued to climb modestly in January (up 40 BP) and February  added 10 basis points to 13.0%.  Multifamily has earned a distant second place in the distressed property type rankings<\/p>\n\n\n\n

The retail and hotel segments continue to battle for third while posting modest changes.  Retail (10.7% –down 10 BP) holding on to third place and hotel (10.2% down 20 BP) is nipping at the heels.  Retail has notched three successive months of modest distress rate decreases. <\/p>\n\n\n\n

As predicted in our last report, the self-storage print of 14.2% was misleading and due to a 16 property ~$2B portfolio reaching maturity. The service commentary indicates the first of three one-year extension options is being exercised.<\/p>\n\n\n\n

\u00a0Accordingly, self storage normalized back down to 2.0% in this print.\u00a0 Industrial also normalized with a 110 basis point decrease to reach a familiar territory (sub 1%) at 0.5%.\u00a0<\/p>\n\n\n

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Payment Status<\/strong><\/p>\n\n\n\n

Our team explored payment status as well.  From a month-over-month perspective, we highlight two key takeaways that are similarly sized<\/p>\n\n\n\n