CMBS Delinquency Rate Sets Another New Post-Crisis Low in August According to Latest Report

NEW YORK, NY - Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its August 2019 US CMBS Delinquency Report. 

The Trepp CMBS Delinquency Rate fell again in August setting another new post-crisis low in the process. The August reading is 2.54%, a month-over-month drop of eight basis points. The delinquency rate, which started to fall after June 2017 when CMBS delinquencies totaled 5.75%, is down 110 basis points year-over-year. Since then, the rate has fallen in 22 of the last 26 months. Year-to date, the rate is lower by 57 basis points. The all-time high of 10.34% was registered in July 2012.

“The concerns about the global economy and a possible US recession have failed to have an impact thus far on the CMBS market,” said Trepp Senior Managing Director, Manus Clancy. “As volatility touched many markets in August, CMBS held steady: spreads saw only modest widening; lending and issuance continued at a healthy rate, and delinquencies continued to fall.”

The largest rate drop among major property sectors in August belonged to the retail space, with its delinquency reading dropping 28 basis points to 4.07%. The lodging delinquency rate also fell last month, by 26 basis points, reaching 1.54%. Multifamily delinquencies climbed 35 basis points to 2.39% and the office delinquency reading also rose 12 basis points to 2.83% last month. 

The overall CMBS 2.0+ delinquency rate climbed five basis points in August to 0.89%, while the percentage of CMBS 2.0+ loans in serious delinquency was up one basis point to 0.80%. The CMBS 1.0 delinquency rate dropped 145 basis points to 42.03% in August and the percentage of CMBS 1.0 debt that is seriously delinquent is now 41.97%, which is down 246 basis points from July.

The full report can be accessed at Trepp.com

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