US CMBS Delinquency Rate Moves Higher for the First Time in Eight Months

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Trepp has released its March 2018 CMBS Delinquency Report which analyzes the latest delinquency rate and why it increased month over month.

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While the Trepp delinquency rate hit a small speed bump in March...we still believe there are more rate drops coming in 2018.

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

After eight consecutive months of improvement, the Trepp CMBS Delinquency Rate increased for the first time since June 2017. The overall delinquency rate for US commercial real estate loans in CMBS rose four basis points from its February level to 4.55%. During the delinquency rate’s eight-month streak of improvement, the reading shed a total of 120 basis points.

“While the Trepp delinquency rate hit a small speed bump in March,” said Trepp Senior Managing Director, Manus Clancy, “we still believe there are more rate drops coming in 2018. In fact, we believe that the reading could break the post-crisis low from 2016 in the coming months. Loans that were originated post-crisis are performing well and will continue to grow in 2018 as the volume of CMBS 1.0 debt continues to be resolved away.”

Trepp’s March delinquency report also includes the delinquency readings for loans in CMBS 1.0 and CMBS 2.0+. The official origination cutoff for CMBS 1.0 is 2008, while 2009 is the beginning of CMBS 2.0+. Delinquency rates for CMBS 1.0 and 2.0+ use the same criteria as the overall Trepp reading. The CMBS 2.0+ delinquency rate hit 0.55% in March, while the percentage of seriously delinquent 2.0+ loans is 0.39%. The delinquency reading for CMBS 1.0 was 47.84% last month, and the percentage of 1.0 loans that are seriously delinquent clocked in at 47.62%.

The largest rate increase among major property types last month belonged to the office sector, as its delinquency rate surged 34 basis points to 5.80%. Industrial delinquencies slid 23 basis points to 5.31% in March, making it the largest rate improvement observed last month. The retail delinquency reading fell 17 basis points to 5.99% in March.

For additional details, such as historical comparisons and analysis on potential future rate moves, download the March 2018 US CMBS Delinquency Report: http://info.trepp.com/march-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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