July 5, 2017
The CMBS “wall of maturities” finally made its presence felt in the market. Delinquencies jumped 28 basis points in June, an increase of 5.75% from May, according to the latest research by Trepp. That marks the largest rate increase in more than five years, and is the 13th month in the past 16 that it has increased.
The post-crisis low occurred in Feb 2016, but the rate has steadily increased over the past year as a result of loans executed in 2006 and 2007 now reaching maturity without being paid off. Roughly $2.4 billion in loans became newly delinquent in June.
The last time the delinquency rate increased so much was in March 2012. June’s rate is 115 basis points higher than the year-ago level, and 52 basis points higher year-to-date.
Delinquency readings by property type:
- Multifamily spiked 110 basis points to 3.92%
- Industrial 20 basis points increase to 7.57%
- Lodging jumped 11 basis points to 3.53% (now best performing major property type)
- Office increased 21 basis points to 7.46%
- Retail rose 15 basis points to 6.65%
For comments, questions or concerns, please contact Dennis Kaiser