NEW YORK–After five consecutive months of increases, the Trepp CMBS Delinquency Rate reversed course in August and dropped for the first time since February.
The delinquency rate for U.S. commercial real estate loans in CMBS is now 4.68%, a decrease of eight basis points from July, according to the company’s analysis. The rate is 77 basis points lower than the year-ago level and 49 basis points lower since the beginning of the year. The multi-year low of 4.15% was reached in February 2016. The all-time high was 10.34% in July 2012, Trepp reported.
“In August, CMBS loans that were previously delinquent but paid off with a loss or at par totaled over $1 billion,” Trepp said. “Removing these previously distressed assets from the numerator of the delinquency calculation helped move the rate down by 22 basis points. A little over $650 million in loans were cured last month, which helped push delinquencies lower by another 13 basis points. However, almost $1.25 billion in loans became newly delinquent, which put 26 basis points of upward pressure on the delinquency rate.”
According to Trepp, the numbers show:
- The overall U.S. CMBS delinquency rate fell eight basis points to 4.68%.
- The percentage of loans seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) is now 4.58%, down nine basis points for the month.
- If defeased loans were taken out of the equation, the overall 30-day delinquency rate would be 4.91%, a decrease of six basis points from July.
Trepp also provided this Property Type Analysis:
- The industrial delinquency rate fell six basis points to 5.57%.
- The lodging delinquency rate increased three basis points to 3.15%.
- The multifamily delinquency rate decreased 13 basis points to 2.38%. Apartment loans are the best performing major property type.
- The retail delinquency rate added five basis points to 5.81%.