NEW YORK, NY - Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its February 2014 US CMBS Delinquency Report.
Trepp has anticipated continued improvement in the US CMBS delinquency rate, as February marks the ninth straight month in which the rate has fallen. The rate is now 6.78%, a 47-basis-point drop month-over-month. The last time the delinquency rate for US commercial real estate loans in CMBS was below 7% was February of 2010.
Since October 2013 when it was announced that CWCapital would be selling a large number of non-performing assets, Trepp has been tracking both the completed and impending sales. With over $3 billion in distressed assets out for bid, Trepp estimated a 50-basis-point decrease in the delinquency rate as a result of removing those loans from the delinquent category. A big chunk of the assets were resolved in time for the February remittance cycle, which explains the increase in loan liquidations this month. The total number of loans resolved with losses in February was more than twice the amount posted in January.
"The long-awaited resolution of the CWCapital distressed asset portfolio helped push delinquencies to multi-year lows," said Manus Clancy, Senior Managing Director at Trepp. "Beyond that, the removed uncertainty and decent results gave investors greater confidence to reach for yield in February. The outcome was a big rally of legacy mezzanine paper over the last 28 days."
New delinquencies totaled $1.4 billion in February, down from $1.8 billion in January. In addition, all of the five major property types saw their delinquency rates improve over the course of the month. While retail loans remain the best performing property type, the industrial delinquency rate fell by more than 1%.
For additional details, such as delinquency status and historical comparisons, request the February 2014 US CMBS Delinquency report at www.trepp.com/knowledge/research