The nationwide delinquency rate for commercial mortgages spiked in March, rising well past the 12-month average and to a five-month high. In its March 2012 U.S. Commercial Mortgage-Backed Security Delinquency Report, Trepp measured the delinquency rate to be 9.68 percent, up from 9.37 percent in February and 9.42 percent in March 2011.
Multi-family properties were responsible for much of the rise, as that sector’s delinquency rate rocketed 74 basis points to 15.39 percent. Meanwhile, office delinquency rates jumped 37 basis points from February to an all-time high of 9.41 percent. Hotels were the only property type to see a declining delinquency rate — falling 42 basis points to a 10.63 percent delinquency rate. At 8.24 percent, retail retained its title as the best performing commerical sector.
Having complete data for the first quarter of this year, Trepp analyzed the performance of 2007 first-quarter loans, when $9 billion worth of five-year loans were famously originated just months prior to the real estate crash.
Of the loans due by the first quarter of this year, just 48 percent were paid off by their maturity date or resolved with a loss. Four-fifths of those were paid off in full, while the remaining fifth suffered losses, mostly less than 2 percent.
Just about half of the remaining 52 percent of loans that came due are listed as non-performing, while 23 percent of them are in some stage of foreclosure.
Meanwhile, for the fifth time in the last six months, the CMBS market has tightened, according to Trepp. Spreads have decreased each of the last four months. — Adam Fusfeld