NEW YORK–While the delinquency rate around housing in the U.S. continues to shrink, the same can’t be said for commercial real estate.
According to the latest Trepp CMBS Delinquency Rate data, the delinquency rate for U.S. commercial real estate loans in CMBS as of March 31 was 5.37%, an increase of six basis points from February. The reading has consistently climbed over the past year as loans from 2006 and 2007 have reached their maturity dates and have not been paid off via refinancing, Trepp reported. The rate has moved higher in 11 of the last 13 months.
“The rate is now 115 basis points higher than the year- ago level, and 14 basis points higher year-to-date. The reading hit a multi-year low of 4.15% in February 2016,” Trepp said.
The all-time high was 10.34% in July 2012.
The company pointed out that in late 2016 it noted that "it is hard to see the rate going down anytime in the near future." It is projecting the trend will continue until the summer as the "wall of maturities" plays out. The rate should begin to level off or retreat later in 2017.
Industrial, retail, and lodging delinquencies helped push the rate higher in March, the analysis found.
In March, almost $2.0 billion in loans became newly delinquent. This put 46 basis points of upward pressure on the delinquency rate. Over $500 million in loans were cured last month, which helped push delinquencies lower by 12 basis points, according to Trepp’s analysis.