March 6, 2019
New research by Trepp shows the CMBS delinquency rate broke through the 3% threshold in February, and the reading continues on a steady decline. The February overall U.S. reading fell 15 basis points to 2.87% while hitting yet another post-crisis low, and the delinquency rate is 164 basis points lower year-over-year.
Trepp notes in its latest report, “the reading started to fall after the June 2017 report when CMBS delinquencies registered 5.75%. Since then, the rate has fallen in 18 of the last 20 months. The all-time high of 10.34% came in July 2012.”
The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or non- performing balloons) is now 2.84%, down one basis point for the month. And Trepp points out, if defeased loans were taken out of the equation, the overall 30-day delinquency rate would be 3%, 16 basis points lower from January.
A year ago, the U.S. CMBS delinquency rate was 4.51%, and six months ago, the rate stood at 3.64%.
By property type, Trepp found the industrial delinquency rate rose 12 basis points to 2.17%. The lodging reading dipped four basis points to 1.49%, and remains the best-performing major property type.
The multifamily rate moved up 34 basis points to 2.31%. The office delinquency rate declined 34 basis points to 3.13%. The retail delinquency rate fell 15 basis points to 4.77%. Retail remains the worst performing major property type, though Trepp notes the reading has improved in each of the last five months.
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