About 25% of CMBS loans backed by hotel properties in the nation’s top 50 metropolitan statistical areas were delinquent at the end of September, according to data from Trepp LLC, a leading provider of data and analytics to the commercial real estate industry.
For instance, 66.56% of the hotel loan balances in the Portland, Ore., region were delinquent. In Nashville, Tenn., it was 48.80%.
In the Richmond region, 27.01% of the hotel loan balances were delinquent.
Using the same data for commercial mortgage- backed securities loans backed by retail properties, the overall delinquency rate is 13.66% in the Top 50 regions.
The worst market is Minneapolis, where 67.28% of the retail loan balances are delinquent due in no small part to the Mall of America and its $1.4 billion loan balance being delinquent.
The Hampton Roads market is in the Top 10 with a 27.65% delinquency.
The Richmond area fares much better. It is ranked 37th with 5.17% of the retail commercial mortgage-backed securities loan balances delinquent.
Hotel and retail properties are feeling the most pain now, but commercial real estate has not seen the stress that a prolonged downturn will bring.
Moody’s accurately points out that while multifamily loans are widely perceived to be less risky than other types of commercial real estate loans, history doesn’t support that conclusion. In two of the last three recessions, multifamily nonaccrual rates were either on par or even slightly higher than other commercial real estate loans at the peak of credit stress.