NEW YORK, NY - Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its June 2015 US CMBS Delinquency Infographic.
After a significant improvement in May, the Trepp CMBS Delinquency Rate moved modestly higher in June. The delinquency rate for US commercial real estate loans in CMBS is now 5.45%, up five basis points for the month. It is now 60 basis points lower than the year-ago level and 30 basis points lower year-to-date.
In June, $1.4 billion in loans became newly delinquent while about $400 million in loans were cured. CMBS loans that were previously delinquent but paid off either at par or with a loss totaled over $1.1 billion in June. Removing these previously distressed assets from the numerator of the delinquency calculation helped offset new delinquencies.
“For most of the year, the commercial real estate markets have been the model of stability in terms of CMBS spreads, delinquency rates, and lending levels,” said Manus Clancy, Senior Managing Director at Trepp. “In late June, the CMBS market got its first whiff of volatility in 2015, as spreads began to widen outside of the range from the first half of the year. With Greece putting everyone on edge and liquidity retreating, we will get a taste of just how resilient the CMBS market is in the face of this uncertainty.”
The percentage of seriously delinquent loans, defined as 60+ days delinquent, in foreclosure, REO, or non-performing balloons, increased in tandem with the overall delinquency rate. The rate of seriously delinquent loans moved up nine basis points to 5.32% in June. If defeased loans were removed from Trepp’s delinquency calculation, the 30-day delinquency rate would be 5.75%.
Out of the five major property types, the industrial delinquency rate had the greatest drop month-over-month as it declined 38 basis points to 7.12%. After a 30-basis-point drop in the multifamily delinquency rate in May, the worst performing property sector reversed course in June, gaining 11 basis points. Lodging remains the best performing among the major property types with a delinquency rate of 3.75%.
For additional details, such as delinquency status and historical comparisons, request the June 2015 US CMBS Delinquency Infographic at www.trepp.com/knowledge/research.