Commercial loan delinquencies edge lower

by Steve Randall11 Dec 2017
The rate of commercial mortgage delinquencies in November was slightly lower than the previous month.

Trepp CMBS data shows a rate of 5.18% in the month, down 3 basis points from October but up from 5.03% a year earlier. It’s the fifth straight month of decrease following 13 increases in the 16 months between March 2016 and June 2017.

The decrease is linked to the end of the 2006/7 era of “bubble loans” which had reached maturity in the previous 16 months and had not been paid off. More of these loans have been resolved since June 2017.

Trepp’s analysis of the data concludes that the decrease is a genuine trend and it now expects that the delinquency rate for commercial mortgage loans should continue lower.

There was a total of $1.1 billion of loans which became delinquent in November 2017. Those that are seriously delinquent amount to 5.01%, down 11 basis points from October.

The property types showing an increase in delinquencies in November were hotels (up 21 basis points to 3.63%) and retail (up 32 basis points to 6.79%).

There were declines in the delinquency rate for industrial (down 14 basis points to 6.10%), multifamily (down 27 basis points to 2.71%), and offices (down 42 basis points to 6.50%).

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