NEW YORK, NY - Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its April 2015 US CMBS Delinquency Report.
After posting no change during the month of March, the US CMBS delinquency rate eked out a single basis point improvement in April. Although the rate drops of 2014 are behind the market, the delinquency rate has still managed to fall 21 times in the last two years. The delinquency rate for US commercial real estate loans in CMBS is now 5.57%, down 87 basis points from the year-ago level.
There are currently $29.5 billion in delinquent loans in CMBS. In April, $1.35 billion in loans became newly delinquent. However, CMBS loans that were previously delinquent but paid off either at par or with a loss totaled almost $600 million last month. In addition, over $700 million in loans were cured last month. Removing these loans from the numerator of Trepp’s delinquency calculation enabled the rate to end down month-over-month.
“The delinquency rate has been bumping along for the last few months, as two competing forces keep it fairly level,” said Joe McBride, Research Associate at Trepp. “Special servicers have slowed the pace of resolutions slightly, keeping the rate from dropping as quickly as it had a year ago. New issuance will have to be the main driver of further rate decreases going forward.”
The percentage of seriously delinquent loans, defined as 60+ days delinquent, in foreclosure, REO, or non-performing balloons, ended the month up three basis points at 5.44%. If defeased loans were removed from Trepp’s delinquency calculation, the 30-day delinquency rate would be 5.90%, up two basis points on this basis from March.
When looking at delinquencies by major property type, only lodging and retail loans posted improvement in April. Lodging remains the best performing property type with a rate of just 4.18%. The multifamily delinquency rate remains the worst performing by property type, with a delinquency rate of 8.92%.