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 March 2011 U.S. CMBS Delinquency Report, which finds that the delinquency rate rose again in March with the percentage of loans 30-plus days delinquent, in foreclosure or REO climbing three basis points to 9.42 percent. Trepp reports that this is the highest in history for U.S. commercial real estate loans in CMBS. This month-over-month increase, however, is smaller than February’s increase and is one of the smallest increases since the beginning of the credit crisis over two years ago. The value of delinquent loans now exceeds $61.5 billion.
The Lodging and Office Sectors boosted the overall delinquency rate in March by increasing 136 and three basis points respectively. The Multifamily Sector improved by 40 basis points, yet remained the worst performing property type, while the retail and industrial sectors also improved by nine and 19 basis points, respectively.
“For the second straight month, we've seen the delinquency rate increase in the low single digits. These are some of the best readings we've seen since the credit crisis began,” said Manus Clancy, managing director of Trepp. “We believe that the overall delinquency rate will continue to rise over the next six months, but at a pace similar to what we've seen recently, not the 40 basis point jumps that we saw in 2009 and early 2010. You cannot discount entirely, however, the possibility that we see the rate decline slightly in one of these months.”