CMBS Delinquency Rate Continued Downward Trend in September According to Latest Trepp Report

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

The Trepp CMBS Delinquency Rate fell slightly in September, once again setting another new post-crisis low in the process. The September reading is 2.51%, a month-over-month drop of three basis points. The delinquency rate is down 90 basis points year over year. The delinquency rate started to fall after June 2017 when CMBS delinquencies totaled 5.75%. Since then, the rate has fallen in 23 of the last 27 months. Year-to-date, the rate is lower by 60 basis points. The all-time high of 10.34% was registered in July 2012.

“The CMBS market stands strong through times of global economic issues and fears of a recession, said Trepp Senior Managing Director, Manus Clancy. “September data showed that the CMBS market held steady: spreads saw some widening; lending and issuance continued at a healthy rate, and the delinquency rate continued on its downward trend.”

The largest rate drop among major property sectors in September belonged to the office space, with its delinquency reading dropping 22 basis points to 2.61%. The lodging delinquency rate also fell last month, by seven basis points, reaching 1.47%. Multifamily delinquencies inched up four basis points to 2.43%. The retail delinquency reading climbed eight basis points to 4.15% last month, continuing retail's title as the worst-performing major property type. 

The overall CMBS 2.0+ delinquency rate fell two basis points in September to 0.87%, while the percentage of CMBS 2.0+ loans in serious delinquency also fell, down one basis point from August. The CMBS 1.0 delinquency rate jumped 184 basis points to 43.87% in September and the percentage of CMBS 1.0 debt that is seriously delinquent remains the same as there are no loans that are exactly 30 days delinquent.

The full report can be accessed at Trepp.com