Jamie Woodwell, vice president of commercial real estate research at MBA, noted that commercial loan performance continues to be very property-type dependent.

Lodging and retail properties were still behind in pandemic recovery but showed significant improvement in July. The balance of delinquent lodging loans dropped from 17.6% to 16.5%, while retail loan delinquencies declined one percentage point to 9% in July. As for other property types, industrial (down to 1.8%), office (3.2%), and multifamily loan delinquencies (1.5%) were at lower levels during the month.

“Office properties saw a decline in overall delinquencies, but there was an uptick in loans that are newly delinquent. The strength of the economy should continue to support most property types in the coming months,” Woodwell said.

Among capital sources, CMBS loans (8.2%) had the highest delinquency rates in July due to the concentration of hotel and retail loans. FHA multifamily and health care loans (2.7%), life company (1.7%), and GSE loan delinquencies (0.9%) followed.