US CMBS Delinquency Rate Inches Up in August

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Trepp released its August 2015 CMBS Delinquency Report, highlighting the rate increase and specific breakdowns for the CMBS market.

CMBS Delinquency Rate by Property Type - August 2015

The fact that the CMBS market stabilized late in the month is a sign of optimism for the rest of the year.

Trepp, LLC, the leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its August 2015 US CMBS Delinquency Infographic today (available at http://info.trepp.com/august-2015-cmbs-delinquency-infographic).

The Trepp CMBS Delinquency Rate increased three basis points in August, negating July’s rate improvement. The delinquency rate for US commercial real estate loans in CMBS is now 5.45%, down 30 basis points year-to-date. Compared to the year-ago level of 6.10%, the rate is down 65 basis points.

In August, $1.3 billion in CMBS loans became newly delinquent, bringing total delinquencies to $28.4 billion. About $425 million in loans were cured last month while loans that were previously delinquent but paid off either at par or with a loss totaled over $1 billion. “CMBS delinquencies continue to be range bound and we expect this to continue for the foreseeable future,” said Manus Clancy, Senior Managing Director at Trepp. “The oft-discussed ‘wave of maturities’ coming due could weigh unfavorably on the rate, but refinancing conditions remain encouraging, which should help keep delinquencies in check. The fact that the CMBS market stabilized late in the month is a sign of optimism for the rest of the year.”

The percentage of seriously delinquent loans, defined as 60+ days delinquent, in foreclosure, REO, or non-performing balloons, increased along with the overall delinquency rate. The rate of seriously delinquent loans rose six basis points to 5.28% in August. If defeased loans were removed from Trepp’s delinquency calculation, the 30-day delinquency rate would be 5.75%.

By property type, delinquencies increased for three of the five major sectors in August. Multifamily loans posted the largest month-over-month rate increase, jumping 23 basis points to 8.99%. The greatest improvement belonged to lodging, which remains the best-performing property type. Lodging’s delinquency rate shrunk 26 basis points in August to 3.44%.

For additional details, such as delinquency status and historical comparisons, download the August 2015 US CMBS Delinquency Infographic at http://info.trepp.com/august-2015-cmbs-delinquency-infographic. For daily CMBS commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, LLC, founded in 1979, is the leading provider of information, analytics and technology to the CMBS, commercial real estate and banking markets. Trepp provides primary and secondary market participants with the web-based tools and insight they need to increase their operational efficiencies, information transparency and investment performance. Trepp serves its clients with products and services to support trading, research, risk management, surveillance and portfolio management. Trepp is wholly-owned by dmgi, a division of the Daily Mail and General Trust (DMGT).

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Joe McBride
Trepp
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