US CMBS Delinquency Rate Retreats Following Big June Jump

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Trepp has released its July 2017 CMBS Delinquency Report today, which highlights a substantial rate decrease after June’s upsurge.

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We may see the delinquency rate dance around a bit over the next few months as we enter the final innings of the wall of maturities.

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

After the Trepp CMBS Delinquency Rate climbed by its highest amount in more than five years last month, the reading rescinded by nearly the same figure in July. The delinquency rate for US commercial real estate loans in CMBS is now 5.49%, a decrease of 26 basis points from June. The July 2017 rate is now 73 basis points higher than the year-ago level.

“We may see the delinquency rate dance around a bit over the next few months as we enter the final innings of the wall of maturities,” said Manus Clancy, Senior Managing Director at Trepp. “There are enough large loans that can be resolved via modification, default, or refinancing that we may see the status of those assets change over the next few months. It’s a fittingly uncertain ending for many loans that have been mired in uncertainty for almost a decade.”

About $1.4 billion in CMBS loans turned newly delinquent in July, which is around $1 billion less than the total that became delinquent in June. Nearly $1.2 billion in previously delinquent loans were cured last month, and roughly $1.7 billion worth of previously distressed debt was resolved with a loss or at par.

Delinquency rates for four of the five major property types fell last month. The multifamily reading shed 101 basis points to 2.91%, which helped the apartment sector reclaim the title of best performing major property type. The industrial delinquency rate dropped 61 basis points to 6.96%. As the only sector with a higher reading in July, the rate for the lodging sector climbed 15 basis points to 3.68%

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