US CMBS Delinquency Rate Falls Again and Inches Closer to Post-Crisis Low

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Trepp has released its April 2018 CMBS Delinquency Report which highlights the latest rate decrease and whether the reading will pass its previous post-financial crisis low.

We wouldn't be all that surprised if a new post-crisis low for the delinquency rate came before the end of the summer.

Trepp, LLC, a leading provider of information, analytics, and technology to the structured finance, commercial real estate, and banking markets, has released its April 2018 US CMBS Delinquency Report. The full report can be found here: http://info.trepp.com/april-2018-cmbs-delinquency-report-press-release.

Following a brief timeout in March, the Trepp CMBS Delinquency Rate continued on its downward trajectory in April. The overall delinquency rate for US commercial real estate loans in CMBS dropped 19 basis points to 4.36% last month. The rate increased slightly in March after it had dropped in each of the previous eight months. Currently, the delinquency reading is only 21 basis points higher than its post-financial crisis low of 4.15% from February 2016.

“The delinquency rate continues to fall as expected,” said Trepp Senior Managing Director, Manus Clancy, “with distressed legacy loans being resolved away at a brisk pace and newly originated loans being added to the mix. We wouldn't be all that surprised if a new post-crisis low for the delinquency rate came before the end of the summer.”

The CMBS 2.0+ delinquency rate was 0.55% in April, meaning it was unchanged from the previous month. The percentage of seriously delinquent 2.0+ loans climbed 12 basis points higher to 0.51%. The delinquency reading for the CMBS 1.0 universe was 47.41% in April, down 43 basis points from March. The percentage of 1.0 loans that are seriously delinquent also fell, as that rate slid 36 basis points to 47.26%.

Delinquency readings for all five major property types improved in April, with the industrial sector posting the largest month-over-month drop. The industrial delinquency rate plunged 78 basis points to 4.53% last month. Hotel delinquencies also dropped notably, as that segment’s reading fell 37 basis points to 2.98%. The office delinquency rate shed 23 basis points to 5.57% in April.

For additional details, such as historical comparisons and analysis on potential future rate moves, download the April 2018 US CMBS Delinquency Report: http://info.trepp.com/april-2018-cmbs-delinquency-report-press-release. 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. From its offices in New York, San Francisco and London, Trepp serves its clients with products and services to support trading, research, risk management, surveillance and portfolio management. Trepp is wholly-owned by 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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