US CMBS Delinquency Rate Inches Up After Large Drops in Last Two Months

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Trepp released its March 2016 CMBS Delinquency Report today, highlighting the rate's first increase this year.

CMBS Delinquency Rate by Month

"Even with the small uptick in delinquencies this month, it was a good month for CMBS."

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

The Trepp CMBS Delinquency Rate increased seven basis points in March after plummets in January and February. The delinquency rate for US commercial real estate loans in CMBS is now 4.22%. The rate is 136 basis points lower than the year-ago level and the all-time high was 10.34% in July 2012.

In March, CMBS loans that were previously delinquent but paid off with a loss or at par totaled over $700 million. Removing these previously distressed assets from the numerator of the delinquency calculation helped move the rate down by 15 basis points. Over $600 million in loans were cured last month which dropped delinquencies by another 12 basis points. About $1.7 million in loans became newly delinquent, which put 33 basis points of upward pressure on the delinquency rate.

“Even with the small uptick in delinquencies this month, it was a good month for CMBS,” said Manus Clancy, Senior Managing Director at Trepp. “Spreads tightened considerably, new issues came to market well inside of where they were in February, and volatility subsided; all positive things for the market heading into the second quarter.

By major property type, delinquency rates increased for three of the five sectors in March. The office delinquency rate increased the most, escalating 25 basis points to 5.23%. The multifamily and retail sectors were the only to improve in March, dropping to 2.34 and 5.33, respectively. Apartment loans remain the best-performing major property sector.

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-march-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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