Delinquency rates for bank-held commercial real estate (CRE) loans increased in the first quarter, with all major property types other than industrial showing greater distress, Trepp reported last week. Lender concern about risk, indicated by criticized loan rates, increased across multiple regions for primarily the multifamily and office property sectors.
Trepp said the pace of origination volume slowed dramatically in both Q4 2022 and Q1 2023, with Q1 2023 commercial mortgage origination volume at only about 40% of 2019’s quarterly average.
Meanwhile, Q1 saw more sizable increases in CRE mortgage delinquencies than the prior quarter. The total delinquency rate rose 23 basis points from 0.80% in Q4 2022 to 1.03% in Q1 2023 quarter. The serious delinquency rate, or the non-current loan rate, also experienced an uptick of 23 bps, increasing from 0.55% in Q4 2022 to 0.78% in 2023’s first quarter.
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