Trepp LLC, a provider of commercial mortgage-backed securities (CMBS) and commercial mortgage information, analytics and technology to the global securities and investment management industry, has released its December 2010 Delinquency Report. According to the report, the U.S. CMBS delinquency rate rose again in December with the percentage of loans 30 or more days delinquent, in foreclosure or real estate-owned (REO) climbing 27 basis points to 9.20 percent, the highest in history for U.S. commercial real estate loans in CMBS.
The value of delinquent loans now exceeds $61.5 billion. The decline in the delinquency rate in October 2010 now appears to have been a blip, as the rate has since increased by 62 basis points. December’s 27 basis point jump comes despite the fact that new issues continued to make their way into the calculation and servicers continued to resolve troubled loans. The new deals—which theoretically should have low delinquencies for a while—will continue to put downward pressure on the delinquency rate as issuance continues to grow in 2011. Similarly, the resolution of troubled loans will also help to lower the rate.
“Many have speculated that between the emergence of new CMBS lending, the resolution of many troubled CMBS loans and an uptick in trophy property sales, that the commercial real estate crisis was nearing its final stages,” said Manus Clancy, managing director of Trepp. “The December delinquency rate underscored that there still may be some nasty surprises in store even as the market shows some signs of healing.”
For more information, visit www.trepp.com.