The delinquency rate for commercial mortgage-backed security (CMBS) loans fell five basis points to 9.6% in May, Trepp LLC reports. The decline represents the biggest rate drop for CMBS loans in about two years, not including October 2010, when the massive Extended Stay Hotels loan was resolved.
Trepp's delinquency rate includes loans that are 30+ days delinquent, in foreclosure or in real estate owned status. The value of delinquent loans is now $61.5 billion, the firm reports.
"Last month, the delinquency rate posted its biggest rate of increase since late 2010 – a 23 basis-point jump," says Manus Clancy, managing director of Trepp. ‘The increase took many CMBS pros by surprise, as it came after three consecutive months of improving results. While there may be additional bumps along the way, we think the May numbers accurately reflect a leveling off in the market."
The delinquency rate for loans on industrial properties rose 120 basis points last month, bumping the rate to almost 12%. Six months ago, the rate was below 7%.
The delinquency rate for office properties, the best-performing property type, grew three basis points to 7.23% in May. All other major property types recorded decreases in delinquency rates for the month.
