The delinquency rate for U.S. commercial real estate (CRE) loans in commercial mortgage-backed securities (CMBS) moved up 21 basis points (bps) in October to 9.77%, its second-highest rate ever, according to new data released by Trepp LLC. Only the 9.88% reading in July 2011 was higher. The value of delinquent loans is now $60.2 billion.
Among CRE property sectors, the retail delinquency rate was the strongest, down 1 basis point in October to 7.61%. In comparison, the multifamily delinquency rate dropped 23 bps in October, but remains the worst major property type at 16.73%. The hotel delinquency rate jumped 82 bps to 14.12%, and the office delinquency rate rose 66 bps to 8.95%. The industrial delinquency rate increased 21 bps to 11.59%.
‘After taking a beating over the prior three months, the CMBS market finally saw some spread tightening in October,’ says Manus Clancy, managing director of Trepp. ‘This improvement may ultimately lure lenders back into the market, but it may be a while before it shows up in new CMBS issuance or reduced CMBS delinquencies.’