DBRS Morningstar CMBS Monthly Highlights—April Remittance: Falling Hotel and Retail Delinquency Rates Aren't Enough to Offset Rising Office Delinquency Rate

-- Decreases in delinquent hotel and retail loans weren't enough to outweigh a sizable increase in delinquent office loans, which pushed the overall delinquency rate for loans packaged in U.S. commercial mortgage-backed securities up 7 basis points (bps) to 3.07%.

-- Tightened credit conditions and uncertainty about demand has left the office sector with the largest increase in the delinquency rate since April 2022.

-- Of the 10 largest metropolitan statistical areas, San Francisco has seen the largest increase in its delinquency rate year over year, followed by Philadelphia, each up more than 4 percentage points.

-- The special servicing rate rose for the third straight month, up 8 bps to 6.00%, its highest level since January 2022.

-- The office special servicing rate spiked 60 bps higher from March 2023 and is up 226 bps from April 2022, the highest of any property type.

-- Distressed property sales remained subdued, registering just $217.8 million, and the year-to-date (YTD) loss rate stands at 47.5%.

-- The maturity payoff rate fell moderately to 55.5% from 60.1% in March.

-- The YTD maturity payoff rate stands at 60.7%. DBRS Morningstar's 2023 outlook for the maturity payoff rate at roughly 55% to 60% isn't much changed because of the persistent complications that will continue to challenge refinancing maturing office and mall loans.