CMBS delinquency rate continues 8-month trend

by Steve Randall12 Mar 2018

There was a further decrease in the delinquency rate for commercial  mortgage backed securities (CMBS) loans in February.

Research from Trepp shows the rate dropped 32 basis points to 4.51%, continuing an 8-month downward trend. The firm says it is confident in predicting that the rate will fall lower than the post-crisis low of February 2016.

With the ‘Wall of Maturities’ from bubble-year loans continuing to close, Trepp says it believes that the reductions will continue over the next few months.

There has been a fall of 124 basis points in the Trepp CMBS Delinquency Rate since June 2017, with a downward trend each month.

The February rate of 4.51% is 80 basis points lower than a year earlier and the multi-year low was two years’ ago (4.15%). The all-time high was in February 2012 (10.34%).

Almost $600 million in loans became newly delinquent in February, adding 13 basis points to the delinquency rate but more than $800 million in notes were cured last month, which reduced the delinquency rate by 20 basis points. More than $700 million in previously delinquent CMBS debt was resolved with a loss or at par in February.

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