US CMBS Delinquency Rate Sets Another Post-Crisis Low in July

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Trepp has released its July 2018 CMBS Delinquency Report which highlights the rate’s continued improvement and the lodging sector’s new position as the lowest reading among major property types.

CMBS Delinquency Rate

CMBS market participants have to be extremely pleased with 2018 thus far.

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

The Trepp CMBS Delinquency Rate dropped 14 basis points to 3.81% in July, which is the reading’s new post-crisis low. Delinquencies continue to fall thanks to the resolution of distressed legacy debt and the lively pace of new loans being incorporated into the market. Since the beginning of 2018, the CMBS Delinquency Rate has jumped lower by more than 1%. Trepp researchers feel that the delinquency reading could break the 3% threshold by the end of the year.

“CMBS market participants have to be extremely pleased with 2018 thus far,” said Trepp Senior Managing Director, Manus Clancy. “Loans from the Wall of Maturities continue to be resolved briskly and with smaller losses than anticipated. New issuance has surpassed expectations as the industry grows its footprint beyond maturing debt. All of that has contributed to a lowering of the delinquency rate.”

The delinquency rate for CMBS 2.0+ loans slid up three basis points to 0.52% in July. The reading for 2.0+ debt which is seriously delinquent is now 0.42%, one basis points higher month over month. After a small increase in June, the CMBS 1.0 delinquency rate shed 79 basis points to 46.40% in July. The reading of seriously delinquent CMBS 1.0 debt decreased 82 basis points to 46.27%.

After more than two years as the best performing major property type, the multifamily sector has been dethroned. The lodging delinquency rate fell seven basis points to 2.25% in July, making it the lowest delinquency rate among the major property segments. The apartment reading climbed seven basis points to 2.35% last month. July’s largest month-over-month drop belonged to the industrial sector, as its rate jumped 46 basis points lower to 4.21%.

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