CMBS Delinquency Growth Slowing, But Still Reaching New High

Trepp's March delinquency report on commercial mortgage-backed securities (CMBS) notes that CMBS delinquencies registered the smallest month-to-month growth in six months, but all sectors still registered higher delinquency rates at the end of February.

Delinquencies rose 23 basis points (bps) in February, compared to an average increase of 50 bps over the last six months.

The overall 6.72% delinquency rate is an all-time high, Trepp says. The delinquency rate is highest in the lodging sector, at 15.65% (or 33 bps higher than a month before). The office delinquency rate saw a 43 bps jump month-over-month. That sector's delinquency rate in February was the lowest of all the sectors that Trepp tracks (4.33%, compared to industrial's 4.75% rate, multifamily's 9.87% rate and retail's 5.74% rate).

However, the overall and multifamily delinquency rates do not yet include the Stuyvesant Town delinquency, which would add 40 bps to the total, Trepp says.

On a positive note, Trepp reports that the CMBS market staged a rally in February, with recent vintage 10-year super senior spreads dropping 30 to 40 points during the month.



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