Commercial and multifamily delinquencies fell in Q1 2022, according to the Mortgage Bankers Association’s (MBA) Commercial/Multifamily Delinquency Report.
MBA looked at commercial/multifamily delinquency rates for five of the largest investor groups: commercial banks and thrifts, commercial mortgage-backed securities (CMBS), life insurance companies, and Fannie Mae and Freddie Mac. These groups hold more than 80% of outstanding debt in these categories.
The number of banks and thrifts overdue by 90 or more days fell to 0.56% from Q4 2021. The number of life company portfolios 60 or more days late rose slightly to 0.05%, while Fannie Mae fell to 0.38%. Freddie Mac remained unchanged at 0.08%.
CMBS that were 30 or more days delinquent or in REO dropped to 3.36%.
“Commercial and multifamily mortgage delinquency rates that were elevated by the onset of the COVID-19 pandemic continued to come down during the first quarter of 2022,” said Jamie Woodwell, MBA’s Vice President of Commercial Real Estate Research.
“Given the strength in market fundamentals and valuations for most property types, delinquency rates are at the lower end of their historical range for most major capital sources.”
Construction and development loans are not included by MBA but are included in many regulatory definitions of ‘commercial real estate’ despite the fact they are often backed by single-family residential development projects.
Industrial and multifamily are especially hot right now and considered “darlings” of commercial real estate. Credit to finance a commercial or multifamily deal is available, and banks are looking to distribute it, according to Michael Visser, an investment specialist at Advantage Commercial Real Estate Services LLC in Grand Rapids.
“There’s no shortage of banks looking to lend dollars. So really any deals we’ve had, we’ve had multiple banks interested in underwriting the deal,” he said.
“We have a great group of banks here and they’re all looking to get funds deployed.”