Trepp Reports on the Status of Loans That Were Delinquent During Height of the Pandemic

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To better understand what happened to CMBS loans that became newly distressed due to the pandemic, Trepp examined the pool of loans that became delinquent during the first three months of the COVID-19 crisis.

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Trepp, a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets, has released a report examining the pool of loans that became delinquent during the first three months of the COVID-19 crisis. The report can be accessed here: https://info.trepp.com/current-status-of-delinquent-loans-report-pr.

To better understand what happened to commercial mortgage-backed securities (CMBS) loans that became newly distressed due to the pandemic, Trepp examined the pool of loans that moved to the delinquency bucket during the first three months of the coronavirus market crisis. Specifically, Trepp isolated loans that were reported to be “30 days” or “60 days” past due on payment in that peak month of June 2020.

"Three months after the U.S. implemented widespread lockdowns last March, CMBS delinquency rates surged to a post-Great Financial Crisis peak of 10.32% in June 2020," said Catherine Liu, Associate Research Manager. "The surge reflected both the immense scale and speed that the distress played out in the commercial real estate industry during the pandemic-induced crisis."

The hardest-hit lodging and retail segments were the main drivers of the spike as delinquencies for the two property types surged to new all-time highs of 24.30% and 18.07%, respectively, that same month. By comparison, the overall CMBS delinquency rate reached a GFC peak of 10.34% in mid-2012 several years after the start of the last economic downturn.

As the Trepp report shows, for those distressed asset buyers worried they have “missed the boat,” very few assets that were distressed in June 2020 have been resolved away. The list of distressed loans sitting in CMBS purgatory remains large and unresolved.

To see the full analysis including an overview of the current status of loans by property type, loans in special servicing, Covid-related modification statuses, the top 10 largest "cured" loans, and more, download the full report here: https://info.trepp.com/current-status-of-delinquent-loans-report-pr.

For daily CMBS and CRE commentary, follow @TreppWire on Twitter.

About Trepp
Trepp, founded in 1979, is a leading provider of data, insights, and technology solutions to the structured finance, commercial real estate, and banking markets. Trepp provides primary and secondary market participants with the solutions and analytics they need to increase 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 subsidiary, Commercial Real Estate Direct, is a daily news source covering the commercial real estate capital markets. Trepp is wholly owned by Daily Mail and General Trust (DMGT).

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Hayley Keen
@TreppWire
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