The Trepp CMBS delinquency rate rose modestly in March. This is the first time the rate has ticked up since June 2017. The delinquency rate for U.S. commercial real estate loans in CMBS is now 4.55%, up 4 basis points (bp) from the February level, which was the lowest reading since September 2016. One year ago, the overall 30-day delinquency rate was 5.37%. The delinquency rate had been declining consistently for more than a year as loans issued in 2006 and 2007 reached their maturity dates and were eventually resolved after the dreaded “wall of maturities” passed, and delinquency levels receded.
Delinquency reached a multi-year low of 4.15% in February 2016. The all-time high was 10.34% in July 2012.
In the beginning of summer 2017, Trepp noted that further rate declines were possible in the following months as the wall of maturities passed. Delinquencies have now fallen in each of the last six months, and further reductions could occur for 2018, despite the 4 bp blip in March.
Delinquency by Property Type, March 2018
Sector | March 2018 |
March 2017 |
BP Change |
---|---|---|---|
Industrial | 5.31% |
5.54% |
-23 |
Lodging |
3.35% |
3.23% |
+12 |
Multifamily |
2.39% |
2.40% |
-1 |
Office |
5.80% |
5.46% |
+34 |
Retail |
5.99% |
6.16% |
-17 |
Source: Trepp