NEW YORK–The Trepp CMBS delinquency rate posted a rare uptick in June 2022, according to the company.
The delinquency rate on commercial mortgage-backed securities moved up just six basis points, and “only time will tell if this is just a blip, or an inflection point triggered by higher borrowing costs for commercial real estate and weakening fundamentals for the US economy,” Trepp stated.
The company noted the new uptick is only the second increase in the rate over the last 24 months. The last increase in the rate came in late 2021.
The Trepp CMBS Delinquency Rate in June was 3.20%, an increase of six basis points in May.
“All major property types saw small increases in their respective delinquency rates in June,” according to Trepp. “The percentage of loans in the 30 days delinquent bucket is now 0.18% – up five basis points for the month.”
Last month, Trepp noted its team asked rhetorically if market volatility, inflation, and interest rates over the last three months would cause a slowing of the rate of improvement in CMBS delinquency levels.
“One month’s data is too small a data point to call the increase in the rate this month a trend, but the direction of the delinquency number over the next few months will give a sense of the impact of recent events on the overall CMBS market,” Trepp said. “Our numbers above reflect percentages that assume defeased loans are still part of the denominator.”
The Overall Numbers
The overall US CMBS delinquency rate moved up six basis points in June to 3.20%. The all-time high on this basis was 10.34% registered in July 2012. The COVID-19 high was 10.32% in June 2020, according to Trepp.
Year over year, the overall US CMBS delinquency rate is down 295 basis points.
Year to date, the rate is down 137 basis points.
Among other data points released by Trepp:
- The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or non- performing balloons) is now 3.02%, up one basis point for the month.
- If defeased loans were taken out of the equation, the overall 30-day delinquency rate would be 3.38%, up five basis points from May.
- One year ago, the US CMBS delinquency rate was 6.15%.
- Six months ago, the US CMBS delinquency rate was 4.57%.
More information can be found here.
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