CMBS delinquency rates continue downward slide

September 03, 2013 04:23PM

Loans in U.S. commercial mortgage-backed securities saw deliquency rates drop for the third straight month in August — falling to the lowest rate in three years, according to a report released by information, analytics and technology provider Trepp.

Though there were about $2.5 billion in new deliquencies in August — slightly higher than July’s $2.4 billion — these delinquent loans were offset by $1.5 billion of loans that cured. And loan resolutions, despite being down nearly 50 percent from July, were just over $1 billion in total, and under half a billion dollars in formerly delinquent loans were paid off in August with no loss.

“August saw a continuation of the year-long downward trend in the Trepp CMBS delinquency rate, which reached an all-time high of 10.34 percent just over 12 months ago,” said Manus Clancy, senior managing director at Trepp. “We anticipate this trend will carry forward in the months ahead as a new wave of expected deals will put additional downward pressure on the numbers.”

In the U.S., there are currently $45.5 billion in delinquent CMBS loans, excluding loans that are past their balloon date but current on interest payments.

Retail was the best performer among major property types, with an improvement of 26 basis points to 6.76 percent delinquent by 30 or more days, while industrial was the worst despite improvement in August, dropping 29 basis points to 11.51 percent. The delinquency rate of lodging properties logged the best month-to-month improvement, while CMBS office loans increased slightly in the delinquency rate. — Julie Strickland