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CMBS Delinquency Rate Up in June

Phil Hall
Jul 07, 2016
Commercial and multifamily mortgage loan originations saw a 17 percent increase from the first to second quarter of this year

The delinquency rate on loans in commercial mortgage-backed securities (CMBS) rose 25 basis points (bps) from May to June and is now at a 4.60 percent level, according to new data from Trepp. Although this is the fourth consecutive month of that this delinquency rate increased, it is still 85 bps higher than a year ago and 57 bps lower since the beginning of the year.

Trepp determined that there are currently $22.5 billion in delinquent loans. Among the different sectors within commercial real estate, the industrial delinquency rate increased 23 bps in June to 5.95 percent, while the lodging delinquency rate jumped 31 bps to 3.27 percent, the office delinquency rate increased 25 bps to 5.76 percent and the retail delinquency rate increased 36 bps to 5.72 percent. Only the multifamily sector saw a decrease in delinquency, falling a single basis point to 2.35 percent.

Last month was marked with a see-saw experience: CMBS loans that were previously delinquent but paid off with a loss or at par totaled almost $900 million, which helped to lower the delinquency rate by 18 bps, and more $500 million in loans were cured last month, which drove delinquencies lower by another 10 bps. However, over $2 billion in loans became newly delinquent, thus adding 42 bps of upward pressure on the delinquency rate. 

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