US CMBS Delinquency Rate Hits Highest Level Since December 2015

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Trepp has released its November 2016 CMBS Delinquency Report and Infographic, highlighting the rate’s ascent back above the 5% level.

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The sharp rise of the 10-year Treasury yield over the last month could make the refinancing of loans with marginal debt service coverage ratios harder and push delinquency levels up quicker.

Trepp, LLC, a leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its November 2016 US CMBS Delinquency Report today. The report can be found here: http://info.trepp.com/november-2016-us-cmbs-delinquency-report-press-release.    

The Trepp CMBS Delinquency Rate continued to climb in November, with more performing loans reaching their maturity dates. The delinquency rate for US commercial real estate loans in CMBS is now 5.03%, an increase of five basis points from October. The rate is now just 10 basis points lower than the year-ago level and 14 basis points lower since the beginning of the year. This reading marks the first time that the rate has exceeded 5.0% since December 2015.

In November, CMBS loans that were previously delinquent but paid off with a loss or at par totaled over $800 million. Almost $700 million in loans were cured last month, but over $1.1 billion in CMBS loans became newly delinquent in November.

“The recent uptick in delinquencies has been anticipated for a long time, and we believe it’s encouraging that the incline has been relatively gentle,” said Manus Clancy, Senior Managing Director at Trepp. “However, the sharp rise of the 10-year Treasury yield over the last month could make the refinancing of loans with marginal debt service coverage ratios harder and push delinquency levels up faster.”

The percentage of seriously delinquent loans, defined as 60+ days delinquent, in foreclosure, REO, or non-performing balloons, ascended eight basis points to 4.95% in November. Over $2.6 billion in loans were defeased last month. If all defeased loans were removed from Trepp’s delinquency calculation, the 30-day delinquency rate would be 5.26%.

The lodging delinquency rate underwent the largest month-over-month increase in November among all major property types, as that reading jumped 20 basis points to 3.63%. Over the past 12 months, no other major property type’s delinquency rate has increased more than lodging. The industrial delinquency rate rose 14 basis points to 5.68% last month. Retail was the only sector to post a decrease in its delinquency rate, as that reading fell one basis point to 6.18%.

For additional details, such as delinquency status and historical comparisons, download the November 2016 US CMBS Delinquency Report: http://info.trepp.com/november-2016-us-cmbs-delinquency-report-press-release. For daily CMBS commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, LLC, founded in 1979, is a leading provider of data, analytics, and technology solutions to the global securities and investment management industries. Trepp specifically serves three key sectors: structured finance, commercial real estate, and banking to help market participants meet their objectives for surveillance, credit risk management, and investment performance. Trusted by the industry for the accuracy of its proprietary data, Trepp provides clients sophisticated, comprehensive models and analytics. Trepp is wholly owned by dmg Information, the business information division of Daily Mail and General Trust (DMGT). For more information, visit http://www.Trepp.com.

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Sean Barrie
Trepp
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