The US CMBS delinquency rate has decreased for the first time since February, falling eight basis points in August to 4.68 percent, according to Trepp’s monthly report.
The rate had moved up 16 bps to 4.76 percent in July, marking the fifth straight month of increases, which at the time Trepp attributed to “another uptick in maturity defaults. The rate increased 12 bps in May, 1 bps in April, 7 bps in March and 25 bps in June.
Factoring in the August drop, the rate is 77 bps lower than the year-ago level and 49 bps lower since the beginning of the year. Previously delinquent loans that were paid off with a loss or at par totaled over $1 billion and over $650 million in loans were cured, while $1.25 billion in loans became newly delinquent.
“The pause in the upward momentum of the delinquency rate is a positive sign for investors,” said Manus Clancy, senior managing director at Trepp, in a statement. “With about 18 months to go until the loans representing the wall of maturities are fully digested, we remain cautiously optimistic that losses on these 2006 and 2007 notes will come in at the low end of expectations.”
The rates for three of the five major property types underwent a significant improvement in August. The office delinquency rate fell 20 bps to 6.03 percent; retail sector incurred the largest increase, jumping 5 bps to 5.81 percent; industrial fell 6 bps to 5.57 percent; lodging increased 3 bps to 3.15 percent; and multifamily, still the best performer, dropped 13 bps to 2.38 percent.