After Largest Hike in Five Years, CMBS Delinquency Rate Reverses in July

Though the Trepp CMBS Delinquency Rate climbed steeply in June, it retreated just as quickly in July. The delinquency rate for US commercial real estate loans in CMBS is now 5.49%, a decrease of 26 basis points from the June level.

The rate is now only two basis points higher than where it stood at the end of May. Delinquency readings for four of the five major property types fell in July, with the lodging sector being the only one to increase, according to Trepp.

Here are some other highlights from the latest report:

“After hitting a post-crisis low in February 2016, the reading has consistently climbed since early 2016 as loans from 2006 and 2007 have reached their maturity dates and have not been paid off via refinancing. The rate has moved up in 13 of the last 17 months.

Delinquency readings for four of the five major property types fell in July, with the lodging sector being the only one to increase.

The July rate is now 73 basis points higher than the year- ago level, and 26 basis points higher year-to-date. The reading hit a multi-year low of 4.15% in February 2016. The all-time high was 10.34% in July 2012.

About $1.4 billion in loans became newly delinquent in July. Almost $1.2 billion in loans were cured last month, and about $1.7 billion in CMBS loans that were previously delinquent were resolved with a loss or at par.”

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