December 6, 2017
CMBS delinquencies fell modestly in November, marking the fifth straight month in which the reading has dropped, according to research by Trepp. The delinquency rate for U.S. commercial real estate loans in CMBS now stands at 5.18%, a decrease of three basis points from October’s level.
Trepp’s Manus Clancy notes that after hitting a post-crisis low in February 2016, the reading climbed steadily for more than a year as loans from the “bubble” years of 2006 and 2007 reached their maturity dates and were not paid off. However, the delinquency level has receded since June, as fewer loans are defaulting and those that defaulted in recent years are being resolved away (often with losses).
The percentage of loans that are seriously delinquent (60 or more days delinquent, in foreclosure, REO, or non-performing balloons) is now 5.01%, down 11 basis points for the month. If defeased loans were taken out of the equation, the overall 30-day delinquency rate would be 5.30%, down four basis points from October.
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