U.S. CMBS delinquency rate stabilizes: Trepp

Miami /
Oct.October 03, 2011 12:33 PM

The number of commercial mortgage-backed securities delinquencies evened out in September nationwide, following a jump in July and a slide in August, data from market research firm Trepp, released today, shows. The delinquency rate for U.S. commercial real estate loans in CMBS inched up 4 basis points to 9.56 percent.

The delinquency rates for all major property types were up slightly, except for hotels, Trepp says.

The office delinquency rate was up 12 basis points to 8.29 percent; the industrial delinquency rate jumped 14 basis points to 11.38 percent, and multi-family delinquency increased 52 basis points and remains the worst major property type at 16.96 percent.

The hotel rate was down 46 basis points, but this was mostly driven by the resolution of loans at the national hotel group Red Roof Inn, Trepp data shows. The Red Rood Inn loans were resolved with 50 percent losses, which resulted in the removal of two distressed hotel loans, ultimately reducing the delinquency rate for hotels, but not in the way that investors would have liked.

“In football, the old saying goes that you are never as bad as you look when you’re losing, nor are you ever as good as you look when you’re winning. So was the case with CMBS in September. While many of the headlines were sharply pessimistic in tone, not all of the data was negative,” the report says. — Katherine Clarke


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