According to Trepp, the CMBS delinquency rate declined sharply in September with the latest number being a little over half the level seen at the peak of the COVID-19 pandemic. After two huge jumps in May and June 2020, the rate has now fallen for 15 consecutive months.
The September number represented another sizable decline, with the rate falling nearly 1% over the last two months. The delinquency rate in September was 5.3%, down 39 basis points (bp) from August. The percentage of loans in the 30 days delinquent bucket is 0.2%, down 17 bp for the month. In terms of loans in grace period, 2.2% of loans by balance missed the September payment but were less than 30 days delinquent. That was down 26 bp for the month.
Similarly, Fitch Ratings reported that the U.S. CMBS delinquency rate fell 18 bp to 3.15% in September from 3.33% in August due to continued-strong hotel and retail resolution volume and steady new issuance activity. Fitch expects the delinquency rate to continue to stabilize and dip below 3% by yearend, outperforming the prediction made at the start of 2021, which was anticipated to end the year below 4%.