US CMBS delinquency rate jumps 25bps: Trepp

The US CMBS delinquency rate moved moved 25 basis points higher in June to 4.60 percent, marking the fourth straight month of increases, according to Trepp’s monthly report.

The US CMBS delinquency rate moved moved 25 basis points higher in June to 4.60 percent, marking the fourth straight month of increases, according to Trepp’s monthly report.

The rate had increased 12 bps in May, 1 bps in April and 7 bps in March. The jump in June was rate was pushed higher in part due to a large number of balloon defaults, which are loans that reached their maturity date but were not paid off, according to Trepp.

Balloon-payment
A large number of balloon defaults was partially to blame for the increase.

“Of note is the percentage of loans that were classified as non-performing loans that were past their balloon date,” the report stated.

In June, CMBS loans that were previously delinquent but paid off with a loss or at par totaled almost $900 million; over $500 million in loans were cured; but over $2 billion in loans became newly delinquent, which put 42 bps of upward pressure on the rate. More than $13 billion in loans were paid off.

The rate is still 85 bps lower than the year-ago level and 57 bps lower since the beginning of this year. But the rate is now 45 bps than its multi-year low of 4.15 percent reached in February 2016. The all-time high was 10.34 percent in July 2012.

The industrial delinquency rate moved up 23 bps to 5.95 percent; office increased 25 bps to 5.76 percent; retail delinquency moved to 5.72 percent; lodging jumped 31 bps to 3.27 percent; and multifamily, thanks to the resolution of the Stuy Town loan earlier this year, remained the best performer, falling one basis point to 2.35 percent.

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