Sharp fall for CMBS delinquencies to 15-month low

by Steve Randall11 Jan 2018
The delinquency rate for commercial mortgage-backed securities continued a 6-month trend of decline with a sharp drop in December 2017.

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%. 

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