CMBS Delinquency Rate Slips Below 10%: Trepp #cre


Commercial mortgage-backed security (CMBS) delinquencies have posted substantial declines over the past two months, according to Trepp. After falling 21 basis points in August, delinquencies decreased another 14 basis points in September, bringing the delinquency rate below 10 percent, just barely.


The CMBS delinquency rate is now 9.99 percent, according to Trepp, and the agency predicts the rate should continue to decline over the next few months.

“First, we see no reason for the volume of loans being resolved each month to drop,” Trepp stated in its report. The firm continues to detect interest in distressed real estate while borrowing costs remain low.

In September, $1.77 billion in loans were resolved with losses, up from $1.5 billion in August.

Also contributing to Trepp’s prediction of a continuing decline in the CMBS delinquency rate is the resurgence in new CMBSissuances over the past few months.

“[T]he new loans should dilute the bad legacy loans that still exist,” Trepp stated.

The serious delinquency rate – the percentage of loans 60 or more days delinquent, in foreclosure, REO, or nonperforming balloons – is 9.43 percent after a 14 basis point decline over the month of September.

The rate is lower than the rate recorded both six months ago and one year ago – 9.68 percent and 9.56 percent, respectively.

Among the five categories of CMBS, multifamily properties are experiencing the highest delinquency rate at 14.09 percent, despite an 81 basis point decline in September.

Industrial properties posted the second-highest delinquency rate in September – 12.21 percent – followed by hotel delinquencies at 12.16 percent.

Both office and retail delinquencies declined in September, arriving at 10.48 percent and 8.09 percent, respectively.


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