CMBS delinquency rate accelerates to new record high

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For three months, it had looked like the worst was over for the U.S. commercial mortgage-backed securities market, with delinquencies beginning to level off during the months of January, February and March. But it now appears that the slowdown was only temporary. According to analytics firm Trepp, the CMBS delinquency rate accelerated once again in April, rising 23 basis points to a record-breaking 9.65 percent. In March, the delinquency rate was 9.42 percent. The percentage of “seriously delinquent” loans, or those that are either 60 or more days delinquent, or are in foreclosure, bank-owned or non-performing, was 8.9 percent, up 1 basis point from the rate in March 2011. The jump in the delinquency rate comes despite the fact that special servicers have been resolving more and more distressed CMBS loans in recent months and that there are new, mostly current, CMBS issues now being factored into the equation. The data, Trepp said in its commentary, “indicates that improvement in the legacy CMBS market may continue to be bumpy in the near term.” TRD