Core Insights - The delinquency rate for office mortgages securitized into CMBS reached an unprecedented 11.8% in October, surpassing the peak during the Financial Crisis [1][5] - The multifamily CMBS delinquency rate increased to 7.1%, the highest since December 2015 [6] Group 1: Office CMBS - The office CMBS delinquency rate rose dramatically from 1.8% in October 2022 to 11.8% in October 2023, a 10 percentage point increase [5] - Older office buildings are facing significant challenges due to a shift towards higher-quality spaces and corporate downsizing, exacerbated by the stagnation of return-to-office initiatives [5] - Notable delinquent loans include a $304 million mortgage on Bravern Office Commons in Bellevue, WA, which became vacant after Microsoft did not renew its lease [10][11] Group 2: Multifamily CMBS - The multifamily CMBS delinquency rate of 7.1% is the worst since December 2015, indicating a troubling trend in rental apartment property mortgages [6] - The delinquency rate's peak in December 2015 was influenced by the default of a significant loan on Stuyvesant Town–Peter Cooper Village, which was later resolved through a sale [6] Group 3: Loan Defaults and Curing Processes - Loans are classified as delinquent when borrowers fail to make payments or do not pay off the loan at maturity [9] - The process of "curing" delinquent loans can involve various strategies, including payment of interest, loan modifications, or foreclosure [14] - An example of a "cured" loan is the $96 million office loan backed by HP Plaza, which was fully leased and negotiated a maturity extension after becoming delinquent [15][16]