Trepp recently reported the U.S. CMBS delinquency rate increased to 6.40% in November, rising 182 bps YoY. For context, the all-time high was 10.34% in July 2012, followed by 10.32% in June 2020. Office is the main driver surpassing 10% and up 430 bps YoY. Retail has remained resilient, with delinquencies flat YoY, while the increase in multifamily was primarily due to a large portfolio SASB loan.
Despite the rise in delinquencies, there have been several notably large CRE transactions in the last few months to close out 2024.
December: Valley National Bank sold nearly $1 billion of diverse high-quality performing CRE loans to Brookfield. The loan pool closed at a ~1% discount to par value. The small markdown reflects Brookfield's willingness to pay nearly full value for the assets.
November: Brookfield purchased an $845 million multifamily portfolio from Blackstone across 8 properties totaling 4,143 units. The portfolio includes apartments in Las Vegas, Phoenix, Columbus, Charlotte, and Chapel Hill.
November: Deutsche Bank (one of the larger office lenders) completed the disposal of nearly $1 billion in CRE loans linked to U.S. commercial real estate. The lender made a provision of €23 million in anticipation of the portfolio sale. The CFO stated "this is further evidence of our view that commercial real estate has at least found a floor and is stabilizing."
November: Blackstone announced its acquisition of Retail Opportunity Investments Corp (ROIC) in a deal valued at nearly $4 billion, which represented a ~35% premium over ROIC's closing share price in July. ROIC's portfolio includes 93 grocery-anchored retail properties across West Coast locations including LA, Seattle, San Francisco, and Portland.
