NEW YORK–Delinquency rates in commercial properties have improved in the new year, but there are indications that the improvement could be showing signs of a reversal, according to a new analysis.
After two huge jumps in May and June, the rate has now declined for seven consecutive months, according to Trepp, which tracks the data. Trepp reported its CMBS Delinquency Rate in January was 7.58%, a decline of 23 basis points from the December number. The all-time high on this basis was 10.34% registered in July 2012
The percentage of loans in the 30-day delinquent bucket is 0.74% – down 10 basis points for the month, the company said.
In terms of loans in grace period, 3.07% of loans by balance missed the January payment but were less than 30 days delinquent. That was up from 2.77% in December, Trepp reported.
Other Findings
Other findings in its most recent analysis:
- The percentage of loans with the special servicer dipped from 9.81% in December to 9.72% in January. According to January servicer data, 24.5% of all lodging loans were in special servicing, up from 24.1% in December. In addition, 17.0% of retail loans are with the special servicer, down from 17.2% last month.
- The percentage of loans on servicer watchlist climbed to 22.3% in January from 21.4% last month. (The numbers above reflect percentages that assume defeased loans are still part of the denominator).
- Year over year, the overall U.S. CMBS delinquency rate was up 544 basis points.
- The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) is now 6.84%, down 13 basis points for the month.
- If defeased loans were taken out of the equation, Trepp reported the overall 30-day delinquency rate would be 7.96%, down 28 basis points from December.
- One year ago, the U.S. CMBS delinquency rate was 2.14%.
- Six months ago, the U.S. CMBS delinquency rate was 9.60%.
The CMBS 2.0+ Numbers
• The CMBS 2.0+ delinquency rate fell 21 basis points to 6.83% in January. The rate is up 594 basis points year over year.
- The percentage of CMBS 2.0+ loans that are seriously delinquent is now 6.09%, which is down nine basis points from December, Trepp said.
- If defeased loans were taken out of the equation, the overall CMBS 2.0+ delinquency rate would be 7.17%, down 25 basis points for the month.
Overall Property Type Analysis (CMBS 1.0 and 2.0+)
- The industrial delinquency rate declined 27 basis points to 0.87%.
- The lodging delinquency rate tumbled 61 basis points to 19.19%.
- The multifamily delinquency rate dropped 40 basis points to 2.35%.
- The office delinquency rate dipped four basis points to 2.14%.
- The retail delinquency rate fell 26 basis points to 12.68%.
Property Type Analysis CMBS 2.0+
- Industrial delinquency rate: 0.26% (down 28 basis points month over month)
- Lodging delinquency rate: 18.99% (down 61 basis points)
- Multifamily delinquency rate: 2.44% (down 40 basis points)
- Office delinquency rate: 1.15% (down one basis point)
- Retail delinquency rate: 10.92% (down 28 basis points)