Quarterly U.S. CRE CLO Report: Q2 2024 New Issuance Continues To Remain Dormant While Seasoned Transactions Continue to Show Signs of Stress

There was only one commercial real estate (CRE) collateralized loan obligations (CLO) transaction issued in Q2 2024: AREIT 2024-CRE9. The transaction was static with a balance of $678.4 billion and was primarily composed of multifamily loans at 51%. Industrial, mixed-use, self-storage, and retail comprised the remaining collateral property types. Total CRE CLO issuance for the first-half of 2024 totaled $2.28 billion.

The delinquency rate continued to increase to 8.64%, moving up by 119 basis points (bps) from Q1 2024 at 7.45%. At quarter-end June 2024, 141 loans totaling $4.55 billion were flagged as delinquent for the first time. This includes loans past their maturity dates (non-performing matured balloon and performing matured balloon). The Q2 2024 special servicing rate increased to 5.10% from 4.19%, up by 91 bps from Q1 2024 while the overall loan modification rate for CRE CLOs continued on an upward trend, increasing from 15.21% last quarter to 18.66% as of June 2024.