CMBS Late Pays Hit All-Time High

While the delinquency rate for loans in commercial mortgage-backed securities (CMBS) hit an all-time high in July, the rate of increase in the delinquency rate showed signs of moderating, Trepp reports in its TreppWire Monthly Delinquency Report. The overall CMBS delinquency rate rose to 8.71% last month fom 8.59% in June.

In its commentary, Trepp notes that July's results are significant because they build on promising numbers from June. The delinquency rate rose just 12 basis points in July, on the heels of June's 17 basis-point increase.

Trepp also reports that the number of loan modifications has accelerated dramatically this year, putting downward pressure on the delinquency number as troubled loans get resolved and move from the delinquency category. So far this year, the number of loan modifications has already surpassed the total number of modifications done in 2008 and 2009 combined.

Of the major property types, hotels saw the biggest drop-off in delinquencies (a 60 basis-point decrease) but maintained the highest delinquency rate (18.41%). Industrial properties – still the best-performing property types – saw a 56 basis-point increase, bringing its delinquency rate to more than 6%.Â



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