CMBS Delinquency Rate Still Sinking, by Trepp LLC

File Type: Free Content, Article
Release Date: February 2014
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Last month marked the eighth straight month of improvement in the delinquency rate for commercial mortgage-backed securities (CMBS). In its January 2014 “US CMBS Delinquency Report,” Trepp LLC recounts that the rate decreased 18 basis points over the course of the month to 7.25 percent. The last time the rate rose was in May 2013, when it increased by only four basis points.

January’s rate decrease can be attributed to the almost $1.3 billion in previously delinquent loans that were resolved with losses over the course of the month,” the report notes. From a property type perspective, the:

  • Lodging delinquency rate saw the biggest improvement, falling 56 basis points to 10.67 percent.
  • Industrial delinquency rate increased 13 basis points to 10.59 percent.
  • Office delinquency rate dropped 33 basis points to 7.80 percent.
  • Retail delinquency rate went up by seven basis points to 6.13 percent.
“Retail remains the best performing major property type,” the report notes.

Trepp expects continuing improvement in the near term, adding that “a rate below seven percent could be attainable by early spring, especially as loan resolutions remain very high.”