US CMBS Delinquency Rate Recedes for Third Consecutive Month

CMBS Delinquency Rate by Month

The volume of maturing debt coming due every month has already begun to wane, meaning the rate of delinquent loans should hold steady or recede in the coming months.

Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, released its September 2017 US CMBS Delinquency Report today. The full report can be found here: http://info.trepp.com/september-2017-cmbs-delinquency-report-press-release.

For the third straight month, the Trepp CMBS Delinquency Rate was pushed lower. The delinquency rate for US commercial real estate loans in CMBS is now 5.40%, a decrease of four basis points from August. The September 2017 rate is now 62 basis points higher than the year-ago level.

“After more than two years, the ‘wave of maturities’ has been reduced to a mere ripple,” according to Manus Clancy, Senior Managing Director at Trepp. “The volume of maturing debt coming due every month has already begun to wane, meaning the rate of delinquent loans should hold steady or recede in the coming months. We will probably look back on the past two years with a sense of relief, somewhat like the kid at the beach who nervously spots a big wave approaching, but only to see it downgrade to a small swell when it hits land.”

Nearly $1.3 billion in CMBS loans became newly delinquent in September, which is about $200 million more than what turned delinquent in August. However, more than $800 million in loans were cured in September, and almost $700 million in previously delinquent CMBS was resolved with a loss or at par.

The delinquency rate for the office sector decreased by the largest amount of all major property types in September, as it fell 21 basis points to 7.10%. Also dropping was the retail delinquency rate, as it shed six basis points to 6.55%. The steepest increase among major property types belonged to the lodging sector, as that delinquency reading climbed 35 basis points to 3.84%.

For additional details, such as delinquency status and historical comparisons, download the September 2017 US CMBS Delinquency Report: http://info.trepp.com/september-2017-cmbs-delinquency-report-press-release….

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