The latest data from real estate and finance analysts at Trepp reveals that the delinquency rate for US commercial real estate loans in CMBS fell 29 basis points to 4.89%, the lowest level in 15 months.
“Another sharp drop in the delinquency rate helped cap off a stellar second half of 2017 for the CMBS market,” said Manus Clancy, Senior Managing Director at Trepp. “December’s rate decrease helped the reading finish lower year-over-year, a victory by any stretch of the imagination. The confluence of new issuance spiking in 2017, low market volatility, and a high volume of maturity resolutions ties a nice bow onto the year for CMBS players.”
The value of loans that became delinquent in December was slightly more than $800 million but this was down from $1.1 billion in November.
Around $835 million in loans were cured in December and around $1.6 billion of CMBS loans that were previously delinquent were resolved in the month either at a loss or at par.
Retail led the decline
The largest drop in delinquencies was in the retail sector, down 66 basis points to 6.13%; industrial saw a 43 basis points drop to 5.67%; and multifamily was down 35 basis points to 2.36%.
More market update:
The delinquency rate for commercial mortgage-backed securities continued a 6-month trend of decline with a sharp drop in December 2017.