articles Ratings /ratings/en/research/articles/210706-sf-credit-brief-u-s-cmbs-declining-delinquency-trend-continued-for-the-12th-consecutive-month-in-june-12030274 content esgSubNav
In This List

SF Credit Brief: U.S. CMBS Declining Delinquency Trend Continued For The 12th Consecutive Month In June


Swedish Covered Bond Market Insights 2021

Root and Branch - September 2021: Sustainability KPIs and the balance between E, S and G


HAT Holdings I LLC/HAT Holdings II LLC's Green Commercial Paper Notes Rated


Table Of Contents: S&P Global Ratings Credit Rating Models

SF Credit Brief: U.S. CMBS Declining Delinquency Trend Continued For The 12th Consecutive Month In June


Delinquency And Forbearance Both Declined

The U.S. commercial mortgage-backed securities (CMBS) delinquency (DQ) rate continued to fall in June 2021, while the forbearance rate declined slightly. The overall DQ rate for U.S. CMBS transactions decreased 13 basis points (bps) month over month to 5.2% in June (see chart 1). By dollar amount, total DQs decreased a net $0.4 billion month over month and $20.7 billion year over year to $33.1 billion.

The overall DQ rate decreased 388 bps to 5.2% in June from 9.0% a year earlier (see chart 2).

Chart 1


Chart 2


Forbearance decreased 4 bps to 7.2% in June, which is lower than the 8.1% peak reached in July and August 2020 (see chart 3). The forbearance rate reflects almost equal proportions of loans that are already in forbearance and loans that are requesting forbearance and are currently on the master servicer's watchlist for COVID-19-related hardship. Of the loans that were in forbearance as of May 2021, 3.2% are now performing, while 0.6% became delinquent.

The lodging and retail sectors continued to represent the largest proportion of loans in forbearance and loans currently requesting forbearance relief due to the COVID-19 pandemic, at 60.9% ($28.3 billion) and 28.5% ($13.2 billion), respectively (see chart 4).

Chart 3


Chart 4


Seriously Delinquent Loan Levels Still High

The share of delinquent loans that are 60-plus-days delinquent (i.e., seriously delinquent) is 90.3% as of June (see chart 5). Further, loans that are 120-plus-days delinquent (those reported in the CRE Financial Council investor reporting package with a loan code status of '6') continued to represent the largest portion of delinquent loans, at 42.7%. The outstanding balance of $14.1 billion is much higher than the pre-pandemic levels. As of July 2020, 120-plus-days delinquent loans comprised less than 5.0% of all delinquent loans (see chart 6).

Chart 5


Chart 6


Special Servicing Declined 51 Bps

The overall special servicing rate declined 51 bps month over month to 7.0% in June (see chart 7). The special servicing rate has been declining since it peaked at 9.5% in September 2020. The retail and lodging sectors' special servicing rates also declined month over month, decreasing 121 bps to 13.9% and 226 bps to 16.7%, respectively.

Noteworthy lodging special servicing resolutions in June include the Atrium and Ashford Portfolios. The Atrium Portfolio is a $600 million loan secured by 29 full-service, limited-service, and extended stay hospitality properties, comprising 7,015 keys located across 16 states. The resolution of Ashford Portfolio is a $395 million loan secured by eight full-service hotels totaling 1,964 keys across six states. The retail special servicing rate decline primarily reflects the resolution of Palisades Center Mall, a $388.5 million loan secured by 1.8 million sq. ft. retail property located in West Nyack, N.Y. The loan was modified to include a six-month principal and interest forbearance and a maturity extension through October 2022.

Meanwhile, in-grace loans decreased 80 bps to 1.8% (or $11.7 billion) of the overall outstanding balance in June. This is in line with the pre-pandemic levels observed at the start of 2020. However, the grace-to-DQ conversion rate (i.e., the proportion of outstanding balance that moved from in-grace into DQ month over month) remained elevated at 10.6% in June, compared with the 2.4% reported in March 2020. Newly in-grace loans totaled $5.6 billion in June.

By balance, DQ rates decreased for lodging (66 bps), industrial (13 bps), office (8 bps), while multifamily and retail increased (8 bps) (see chart 8).

Chart 7


Chart 8


Newly Delinquent Loans Totaled $2.3 Billion

There were 90 newly delinquent loans totaling $2.3 billion in June. These included 46 retail loans ($1.5 billion), 22 lodging loans ($334.9 million), six office loans ($223.1 million), eight multifamily loans ($91.9 million), and one industrial loan ($13.2 million).

The largest loan that went delinquent in June was Ingram Park Mall, a regional mall located in San Antonio, Texas, with an outstanding balance of $120 million. The loan was transferred to special servicing on April 21, 2021, for imminent default because the borrower indicated that it had not obtained financing in anticipation of the June 1, 2021, maturity. The loan was placed on the master servicers watchlist in March 2021. Based on the borrower's response dated March 31, 2021, it was attempting to refinance the loan and simultaneously extend the loan maturity from three to five years. The DSCR was 1.55x as of Dec. 31, 2021, the occupancy was at 92.74% as of Jan. 12, 2021, and the property was rated "fair" as of the site inspection dated Jan. 19, 2021.

Charts 9 and 10 show the year-over-year change in the property type composition for delinquent loans. The retail and lodging DQ rate composition declined slightly year over year, with lodging decreasing to 37.6% from 38.5% and retail falling to 40.7% from 43.8%.

Chart 9


Chart 10


The authors would like to thank Bushra Dawawala for her research contributions to this report.

This report does not constitute a rating action.

Primary Credit Analyst:Ambika Garg, Chicago + 1 (312) 233 7034;
Secondary Contacts:Tamara A Hoffman, New York + 1 (212) 438 3365;
Senay Dawit, New York + 1 (212) 438 0132;
Deegant R Pandya, New York + 1 (212) 438 1289;
Research Contacts:James M Manzi, CFA, Washington D.C. + 1 (202) 383 2028;

No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor’s Financial Services LLC or its affiliates (collectively, S&P). The Content shall not be used for any unlawful or unauthorized purposes. S&P and any third-party providers, as well as their directors, officers, shareholders, employees or agents (collectively S&P Parties) do not guarantee the accuracy, completeness, timeliness or availability of the Content. S&P Parties are not responsible for any errors or omissions (negligent or otherwise), regardless of the cause, for the results obtained from the use of the Content, or for the security or maintenance of any data input by the user. The Content is provided on an “as is” basis. S&P PARTIES DISCLAIM ANY AND ALL EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR USE, FREEDOM FROM BUGS, SOFTWARE ERRORS OR DEFECTS, THAT THE CONTENT’S FUNCTIONING WILL BE UNINTERRUPTED OR THAT THE CONTENT WILL OPERATE WITH ANY SOFTWARE OR HARDWARE CONFIGURATION. In no event shall S&P Parties be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees, or losses (including, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages.

Credit-related and other analyses, including ratings, and statements in the Content are statements of opinion as of the date they are expressed and not statements of fact. S&P’s opinions, analyses and rating acknowledgment decisions (described below) are not recommendations to purchase, hold, or sell any securities or to make any investment decisions, and do not address the suitability of any security. S&P assumes no obligation to update the Content following publication in any form or format. The Content should not be relied on and is not a substitute for the skill, judgment and experience of the user, its management, employees, advisors and/or clients when making investment and other business decisions. S&P does not act as a fiduciary or an investment advisor except where registered as such. While S&P has obtained information from sources it believes to be reliable, S&P does not perform an audit and undertakes no duty of due diligence or independent verification of any information it receives. Rating-related publications may be published for a variety of reasons that are not necessarily dependent on action by rating committees, including, but not limited to, the publication of a periodic update on a credit rating and related analyses.

To the extent that regulatory authorities allow a rating agency to acknowledge in one jurisdiction a rating issued in another jurisdiction for certain regulatory purposes, S&P reserves the right to assign, withdraw or suspend such acknowledgment at any time and in its sole discretion. S&P Parties disclaim any duty whatsoever arising out of the assignment, withdrawal or suspension of an acknowledgment as well as any liability for any damage alleged to have been suffered on account thereof.

S&P keeps certain activities of its business units separate from each other in order to preserve the independence and objectivity of their respective activities. As a result, certain business units of S&P may have information that is not available to other S&P business units. S&P has established policies and procedures to maintain the confidentiality of certain non-public information received in connection with each analytical process.

S&P may receive compensation for its ratings and certain analyses, normally from issuers or underwriters of securities or from obligors. S&P reserves the right to disseminate its opinions and analyses. S&P's public ratings and analyses are made available on its Web sites, (free of charge), and and (subscription), and may be distributed through other means, including via S&P publications and third-party redistributors. Additional information about our ratings fees is available at

Any Passwords/user IDs issued by S&P to users are single user-dedicated and may ONLY be used by the individual to whom they have been assigned. No sharing of passwords/user IDs and no simultaneous access via the same password/user ID is permitted. To reprint, translate, or use the data or information other than as provided herein, contact S&P Global Ratings, Client Services, 55 Water Street, New York, NY 10041; (1) 212-438-7280 or by e-mail to:

Register with S&P Global Ratings

Register now to access exclusive content, events, tools, and more.

Go Back