NEW YORK, NY - Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its May 2014 US CMBS Delinquency Report.
May marks the twelfth month of consecutive improvement in the US CMBS Delinquency rate. With a 17-basis-point drop over the course of the month, the rate for US commercial real estate loans in CMBS is now 6.27%. The delinquency rates for each major property type also improved, with the exception of industrial loans.
For the better part of 2012, the CMBS delinquency rate was on a steady incline as five-year loans securitized in 2007 reached their maturity dates. While the first half of 2013 resulted in significant rate fluctuation, the past year has undone what the 2007 loans did to the delinquency rate, and then some. Prior to the loan maturities in the summer of 2012, the US CMBS delinquency rate was still in the 9% range.
"The CMBS market continues to just plug along nicely. In each of the last two years, the market has seen spring-time swoons that led to noticeable spread widening," said Manus Clancy, senior managing director at Trepp. "Right now, CMBS new issue spreads are near their 2014 tights, the new issue dance card is full for the next few months, and the resolution of defaulted legacy loans continue to push the delinquency rate lower."
Loan resolutions exceeded $1 billion in May and served as a strong driver for the rate improvement. Removing the distressed loans from the delinquent loan pool pushed the delinquency rate down by 20 basis points. Loans that cured totaled $800 million, which helped offset the $1.3 billion in new delinquencies in May.
There are currently $33.6 billion in delinquent loans, which is down from $34.1 billion last month. There are $40.4 billion in loans with the special servicer. This represents about 2,450 loans.
For additional details, such as delinquency status and historical comparisons, request the May 2014 US CMBS Delinquency report at www.trepp.com/knowledge/research