US CMBS Delinquency Rate Continues to Drop

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Trepp released its February 2016 US CMBS Delinquency Report, which highlights a second straight month of notable improvement.

CMBS Delinquency Rate by Month

Despite the recent turmoil in new issue CMBS spreads, resolutions of delinquent loans continued apace in February.

Trepp LLC, the leading provider of information, analytics and technology to the CMBS, commercial real estate, and banking markets, released its February 2016 US CMBS Delinquency Report today (available at http://info.trepp.com/thank-you-february-2016-cmbs-delinquency-report).

After an immense drop in January, The Trepp CMBS Delinquency Rate continued to improve in February. The delinquency rate for US commercial real estate loans in CMBS fell to 4.15% in February, a drop of 20basis points from January. The rate is also 143 basis points lower than the year-ago level.

In February, CMBS loans that were previously delinquent but paid off with a loss or at par totaled $930 million. Removing these previously distressed assets from the numerator of the delinquency calculation helped lower the rate by 18 basis points. Over $1.05 billion in loans were cured last month, which lowered delinquencies by an additional 21 basis points. About $1 billion in loans became newly delinquent, which put 20 basis points of upward pressure on the delinquency rate.

“Despite the recent turmoil in new issue CMBS spreads, resolutions of delinquent loans continued apace in February,” said Joe McBride, Research Associate at Trepp. “The effects of the recent pain in new deal pricing may have a negative effect on the delinquency rate in the coming months as CMBS lenders pick their foot up off the accelerator, possibly pushing some marginal maturing loans into default.”

The office delinquency rate improved the most out of all the major property types in February, dropping 26 basis points to 4.98%. After two months of standing pat at 2.82%, the lodging delinquency rate fell 22 basis points to 2.60%. Though apartment loans are still the best performing among major property types, the multifamily delinquency rate slid up six basis points to 2.37% in February.

For additional details, such as delinquency status and historical comparisons, download the February 2016 US CMBS Delinquency Report at http://info.trepp.com/thank-you-february-2016-cmbs-delinquency-report. 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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