US CMBS delinquency rate down 62 bps on the year

The US CMBS delinquency rate has declined for a third straight month, falling by 10 basis points (bps) in November -- and 62 bps year-to-date -- to 5.13%, according to Trepp.

The US CMBS delinquency rate has declined for a third straight month, falling by 10 basis points (bps) in November — and 62 bps year-to-date — to 5.13%, according to Trepp.  

In November, nearly $1 billion in loans became newly delinquent, which put 19 basis points of upward pressure on the rate. But $450 million in loans were cured, pushing the rate down nine basis points; and previously delinquent loans paid off with a loss or at par totaled almost $1.1 billion, pushing the rate down by 21 bps.

The industrial delinquency rate dropped 29 bps to 5.99%; the lodging rate remains the best performing property type and improved by 42 bps to 2.75%; the office rate inched up three bps to 5.73%; and the retail rate dipped eight bps lower to 5.64%.

The multifamily rate meanwhile fell three basis points to 8.15% and remained the worst performing property sector. But, as it did last month, Trepp noted again in its latest report that the forthcoming resolution of the $3 billion Stuyvesant Town/Peter Cooper Village loan will result in a huge drop in the delinquency rate.

But that resolution may take longer than anticipated, as at least four investors are suing special servicer CWCapital Asset Management to prevent the firm from collecting up to $566 million in windfall from the $5.3 billion sale to Blackstone Group and IvanhoeCambridge.

The loan, backed by more than 11,000 apartments in Manhattan, has been REO for years. Its sale will ultimately resolve the $3 billion loan and “the removal of Stuy Town from the list of distressed assets alone should lead to a 60 [bps] drop in the delinquency rate,” according to Trepp.

There are currently $26.4 billion in delinquent loans, excluding loans past their balloon date but current on interest payments.

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