US delinquency rate increases resume: Trepp

The US CMBS delinquency rate resumed its upward climb in September, rising 10 basis points following declines in August, according to Trepp’s monthly report.

The US CMBS delinquency rate resumed its upward climb in September, rising 10 basis points following declines in August, according to Trepp’s monthly report.

August had marked the first month of declines since February, falling eight basis points in to 4.68 percent.

The September hike brings the rate to 4.78 percent, which is still 50 bps lower than the year-ago level and 39 bps lower since the beginning of the year.

screenshot-2016-10-05-at-1-20-28-pmCMBS loans that were previously delinquent but paid off with a loss or at par totaled about $850 million, helping to move the rate down by 17 bps; and almost $500 million in loans were cured last month, pushing delinquencies down an additional 9 bps. But $1.3 billion in loans became newly delinquent, putting 28 basis points of upward pressure on the rate.

“A reduction in the denominator due to the maturation of performing loans accounted for the remainder of the difference,” Trepp noted in the report.

Following the rate reversal in August, Trepp senior managing director Manus Clancy had noted that the “pause in the upward momentum of the delinquency rate is a positive sign for investors.”

“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,” he said.

The office delinquency rate jumped 30 bps to 6.33 percent; the retail rate was up 8 bps to 5.89 percent; industrial dropped 29 bps to 5.28 percent; lodging was up 10 bps to 3.25 percent; and multifamily decreased 5 bps to 2.33 percent.

The reading hit a multi-year low of 4.15 percent in February 2016. The all-time high was 10.34 percent in July 2012.

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