NEW YORK, NY - Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its August 2016 US CMBS Delinquency Report and Infographic.
The Trepp CMBS Delinquency Rate reversed the recent trend and decreased for the first time since February. The delinquency rate for US commercial real estate loans in CMBS is now 4.68%, a drop of eight basis points from July. The rate 77 basis points lower than the year-ago level and 49 basis points lower since the beginning of the year
In August, CMBS loans that were previously delinquent but paid off with a loss or at par totaled over $1 billion. Over $650 million in loans were cured last month, a welcome increase from the $200 million cured in July. $1.25 billion in CMBS loans became newly delinquent in August.
“The pause in the upward momentum of the delinquency rate is a positive sign for investors,” said Manus Clancy, Senior Managing Director at Trepp. “With about 18 months to go until the loans representing the wall of maturities are fully digested, we remain cautiously optimistic that losses on these 2006 and 2007 notes will come in at the low end of expectations.”
The percentage of seriously delinquent loans, defined as 60+ days delinquent, in foreclosure, REO, or non-performing balloons, decreased along with the overall delinquency rate. The rate of seriously delinquent loans inched up nine basis points for the month to 4.58%. If defeased loans were removed from Trepp’s delinquency calculation, the 30-day delinquency rate would be 4.91%.
Delinquency readings for three of the five major property types underwent a significant improvement in August. The office delinquency rate fell 20 basis points to 6.03%, the largest decrease for any property sector last month. The multifamily reading dropped 13 basis points to 2.38%, which is still the best performing rate amongst major property types. The retail sector incurred the largest rate increase of the month, jumping up five basis points to 5.81%.
For additional details, such as delinquency status and historical comparisons, download the August 2016 US CMBS Delinquency Report and Infographic.