US CMBS Delinquency Rate Increases Yet Again in April

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Trepp has released its April 2017 CMBS Delinquency Report today, which highlights the 12th rate increase in the last 14 months.

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Over the last 16 months, about 65% of loans that have reached their maturity date were paid off on their balloon date, a number that has beaten some expectations.

Trepp, LLC, a leading provider of information, analytics, and technology to the CMBS, commercial real estate, and banking markets, released its April 2017 US CMBS Delinquency Report today. The full report can be found here: http://info.trepp.com/april-2017-us-cmbs-delinquency-report-press-release.

The Trepp CMBS Delinquency Rate climbed higher in April, the third straight month in which the reading has been pushed higher. The delinquency rate for US commercial real estate loans in CMBS is now 5.52%, an increase of 15 basis points from March. One of the main reasons for April’s increase was a large amount of CMBS debt that matured without being paid off. After reaching a post-crisis low in February 2016, the reading has moved up in 12 of the last 14 months.

“By most accounts, the CMBS ‘wall of maturities’ has played out better than most predicted,” said Manus Clancy, Senior Managing Director at Trepp. “Over the last 16 months, about 65% of loans that have reached their maturity date were paid off on their balloon date, a number that has beaten some expectations. There are loans that can’t find refinancing, but that is pushing the delinquency rate only modestly higher each month, which is a positive for the market.”

Almost $800 million in CMBS loans were cured last month, and about $860 million in previously delinquent loans were resolved with a loss or at par in April. However, nearly $2.5 billion in CMBS debt became newly delinquent in April. The volume of newly delinquent CMBS debt has come close to or eclipsed $2 billion in each of the last four months.

The largest rate increase among major property types in April belonged to the office sector. That reading increased 59 basis points to 7.97%, and it remains the worst performing property segment. The retail delinquency rate jumped 18 basis points to 6.30%. The only property sector with a lower reading in April was the lodging segment, as its rate fell 48 basis points to 3.22%.

For additional details, such as delinquency status and historical comparisons, download the April 2017 US CMBS Delinquency Report: http://info.trepp.com/april-2017-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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