U.S. CMBS delinquency rate sets new benchmark

TRD New York /
May.May 31, 2012 09:00 AM

The delinquency rate for commercial mortgage-backed securities in the U.S. has surpassed 10 percent for the first time ever, confirming suspicions that a bevy of loans originated just before the market crashed in 2007 would plague lenders as they came due early this year. Citing Trepp data, GlobeSt.com reported the delinquency rate rose to 10.04 percent in May after coming in at 9.80 percent in April. Since February the CMBS delinquency rate has jumped 67 basis points.

In total, $59.1 billion worth of loans are delinquent and an additional $79.2 billion in loans is in special servicing. The multi-family sector is in the worst shape as 15.17 percent of its loans are delinquent. Stuyvesant Town’s $3 billion delinquency accounts for about 4 percent of that figure. But the hotel sector experienced the largest month-over-month delinquency growth, as its rate skyrocketed 172 basis points to exceed 12 percent.

“You have this issue that so much of the lending was done at the worst possible time for CMBS,” said Manus Clancy, senior managing director at Trepp. “In CMBS, there was a huge super spike in 2006 and 2007, and they were making loans for the worst time in the market.”

Clancy said he expects another month or two of increasing delinquency rates before they begin to level off. [GlobeSt]


Related Articles

arrow_forward_ios
Blackstone CEO Steven Schwartzman and Stuyvesant Town (Credit: Getty Images)

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies

After authorities vowed review of Stuy Town deal, Blackstone changes course on vacancies
(Getty, iStock)

Cash-strapped borrowers are increasingly giving keys back to lenders

Cash-strapped borrowers are increasingly giving keys back to lenders
Kroll Bond Rating Agency founder Jules Kroll (Getty; iStock)

Kroll reaches $2M SEC settlement over CMBS, CLO ratings

Kroll reaches $2M SEC settlement over CMBS, CLO ratings
Starwood's Barry Sternlicht and Pacific Retail's Steve Plenge with Parkway Plaza mall in San Diego and the Plaza West Covina mall in Los Angeles (Getty, Starwood, Pacific Retail)

Last bidder standing has big plans for Starwood’s troubled mall portfolio. But first, creditors must sign off

Last bidder standing has big plans for Starwood’s troubled mall portfolio. But first, creditors must sign off
Jared Chupaila, CEO of Brookfield Properties’ retail group, with Florence Mall and Fashion Square (Brookfield, TripAdvisor, iStock)

Brookfield and Namdar plan to hand over keys to struggling malls

Brookfield and Namdar plan to hand over keys to struggling malls
With about $23 billion of hotel-related CMBS loans in forbearance, more lenders are looking to offload those mortgages. (iStock)

Hotel industry is in trouble and more lenders want out

Hotel industry is in trouble and more lenders want out
Matt Salem, KKR head of real-estate credit (Getty; KKR)

Hotel and retail mortgages dragging down recovery

Hotel and retail mortgages dragging down recovery
The special servicing rate has increased each month since the coronavirus pandemic hit the United States, and clocked a 55 basis point increase to 10.04 percent in August (iStock)

CMBS delinquencies fell, but hold the applause

CMBS delinquencies fell, but hold the applause
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...