NEW YORK, NY - Trepp, LLC, a leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its October 2016 US CMBS Delinquency Report.
The Trepp CMBS Delinquency Rate moved up again in October, as more loans issued in 2006 and 2007 continue to mature. The delinquency rate for US commercial real estate loans in CMBS is now 4.98%, an increase of 20 basis points from September. The rate is just 25 basis points lower than the year-ago level and 19 basis points lower since the beginning of the year.
In October, CMBS loans that were previously delinquent but paid off with a loss or at par totaled over $820 million. Almost $500 million in loans were cured last month, but a whopping $1.9 billion in CMBS loans became newly delinquent in October.
“Unsurprisingly, delinquency rates continue to drift higher as borrowers with weak performing properties have found it difficult to refinance the corresponding loans,” said Manus Clancy, Senior Managing Director at Trepp. “Fortunately, the climb in delinquencies has not been terribly steep. With low interest rates and little spread volatility characterizing the current market, many properties with financials on the cusp of ideal refinancing standards are finding a way to muddle through.”
The percentage of seriously delinquent loans, defined as 60+ days delinquent, in foreclosure, REO, or non-performing balloons, increased by the same amount as the overall delinquency rate. The rate of seriously delinquent loans moved up 20 basis points for the month to 4.87%. If defeased loans were removed from Trepp’s delinquency calculation, the 30-day delinquency rate would be 5.20%.
The delinquency rates for all five major property types increased in October. The largest of those increases belonged to the retail sector, as that reading jumped up 30 basis points to 6.19% in October. The industrial delinquency reading added 26 basis points to 5.54%, while the lodging rate moved up 18 basis points to 3.43%.
For additional details, such as delinquency status and historical comparisons, download the October 2016 US CMBS Delinquency Report at Trepp.com