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US CMBS Delinquency Rate Inches Up in August

Download the PDF version of the August 2015 CMBS Delinquency Report

The Trepp CMBS Delinquency Rate continued its summer trend of oscillation and inched up slightly in August. The delinquency rate for US commercial real estate loans in CMBS moved up three basis points in August to 5.45%. The increase undid July’s three-basis-point improvement. The rate is now 65 basis points lower than the year-ago level and 30 basis points lower year-to-date.

In August, $1.3 billion in loans became newly delinquent, which put 25 basis points of upward pressure on the delinquency rate. About $425 million in loans were cured last month, which helped push delinquencies lower by 8 basis points. CMBS loans that were previously delinquent but paid off with a loss or at par totaled almost $1 billion in August. Removing these previously distressed assets from the numerator of the delinquency calculation helped move the rate down by 19 basis points.

The Numbers:

  • The overall US CMBS delinquency rate increased three basis points to 5.45%.
  • The percentage of loans seriously delinquent (60+ days delinquent, in foreclosure, REO, or non-performing balloons) is now 5.28%, six basis points higher for the month.
  • If defeased loans were taken out of the equation, the overall 30-day delinquency rate would be 5.75%–up two basis points from July.
  • There are currently $28.4 billion in delinquent loans. This number excludes loans that are past their balloon date but are current on their interest payments.

Historical Perspective:

  • One year ago, the US CMBS delinquency rate was 6.10%.
  • Six months ago, the US CMBS delinquency rate was 5.58%.
  • One year ago, the rate of loans seriously delinquent was 5.88%.
  • Six months ago, the rate of loans seriously delinquent was 5.42%.

Property Type Analysis:

  • The industrial delinquency rate increased 21 basis points to 7.62%.
  • The lodging delinquency rate improved by 26 basis points to 3.44%. Lodging remains the best performing major property type.
  • The multifamily delinquency rate moved up 23 basis points to 8.99%. Apartment loans remain the worst performing among the major property types.
  • The office delinquency rate fell seven basis points to 5.86%.
  • The delinquency rate for retail loans inched up two basis points to 5.53%.

Compliments of Trepp LLC – A Member of the EACCNY