February 15, 2021 | less than a minute read

Some great news in CRE, but still somewhat of a Tale of Two Cities

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Daniel B. Guggenheim

Member / Co-Chair, Real Estate Practice

Get in touch

Daniel B. Guggenheim

Member / Co-Chair, Real Estate Practice

There's a lot to unpack in this very short update, covering the full spectrum of emotions for CRE investors. On the one hand, hotel and retail are clearly still struggling, and serve as a bit of a reminder of how difficult the past 12 months have been on so many fronts. On the other hand, CMBS delinquencies continue to decline across the board, with nearly 50 bps drops last month for both the hotel and retail sectors, and multifamily and industrial delinquency rates are under 1% - great! This continues to be a period of a challenge and opportunity in CRE, and we appreciate the opportunity to help clients craft and realize upon creative solutions and strategies.

The U.S. CMBS delinquency rate fell 14 basis points to 4.55% in January 2021 from year-end 2020, Fitch Ratings said Friday. The rating agency said the third consecutive monthly decline was due to the slowing pace of new delinquencies and continued strong new issuance volume... The hotel sector posted a 17.88% delinquency rate for January, down 50 bps from December 2020. For retail, the monthly drop was 46 bps to 10.52%. Ranking third for delinquencies is mixed-use at 4.21%. Multifamily and industrial each have delinquency rates below 1%.

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