CMBS Delinquency Rate Down This Month

The delinquency rate for U.S. commercial real estate loans in commercial mortgage-backed securities (CMBS) reached 5.18 percent this month, a drop of five basis points from December’s 14-month peak, according to new data from Trepp LLC. On a year-over-year basis, the rate is above the January 2016 level of 4.35 percent.

 

“The dip in January comes as a bit of a surprise,” said the Trepp report announcing the delinquency rate. “With a cascade of loans from the 2007 vintage coming due in 2017, we noted last month that ‘it is hard to see the rate going down any time in the near future.’ For at least one month, that prediction failed to hold true. We will now watch to see whether this is indeed a blip or an inflection point. One thing that would push the rate lower is a quickened pace of loan resolutions for notes in default. If that were to take place, the reading could certainly hold steady or continue to fall.”

 

The percentage of commercial real estate loans that are seriously delinquent is 5.01 percent, seven basis points lower than December’s rate. Among property sectors, the industrial delinquency rate was up from December by 40 basis points to 6.02 percent and the multifamily delinquency rate spiked by 24 basis points to reach 2.96 percent. Delinquency rates were down among the lodging, office and retail sectors.