US CMBS Delinquency Rate Increases for the First Time in Six Months

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Trepp has released its October 2018 CMBS Delinquency Report which highlights the rate’s first increase in six months.

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October was clearly a turbulent month for certain markets but the CMBS market continues to plug away.

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

The Trepp CMBS Delinquency Rate rose one basis point to 3.42% last month, marking the first rate increase since March 2018. Despite the jump, the delinquency reading is still just one point higher than the most recent post-crisis low. The rate has shed 179 basis points year over year and 147 basis points to date in 2018.

“October was clearly a turbulent month for certain markets but the CMBS market continues to plug away,” said Trepp Senior Managing Director, Manus Clancy. “There was some modest spread widening amid the equity sell-off and issuance has leveled off a bit, but CMBS continues to shrug off most of the broader market volatility.”

Delinquency readings for four of the five major property types decreased in October. The largest drop belonged to the lodging sector as its rate fell 29 basis points to 1.98%. Another notable improvement was observed in the industrial segment thanks to a 17-basis-point slide. Industrial delinquencies now make up just 2.81% of the sector’s outstanding debt. The only property type with a month-over-month rate increase was the retail segment as its reading climbed 38 basis points to 5.39%.

The percentage of CMBS 2.0 debt which is marked as delinquent jumped 12 basis points to 0.62% in October. Conversely, the CMBS 1.0 delinquency rate shed 39 basis points and hit 46.36% last month. By property type, the largest jump in CMBS 2.0+ delinquencies was tied to the retail space as its rate finished 49 basis points higher at 0.93%. The delinquency reading for lodging loans behind CMBS 1.0 debt plunged 540 basis points to 50.54% last month.

For additional details, such as historical comparisons and analysis on potential future rate moves, download the October 2018 US CMBS Delinquency Report: https://info.trepp.com/october-2018-cmbs-delinquency-report-pr. 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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