The delinquency rate for commercial mortgage-backed securities (CMBS) rose to a new high at the end of September, breaking 9% for the first time in history, according to the Oct. 4 TreppWire report.
The silver lining, according to Trepp, is that the 13 basis-point (bp) increase over August was the second lowest increase of the year – the smallest since July's 12-bp bump.
‘For commercial real estate (CRE) bears, the fact that the rate once again set a record is a sign that the CRE crisis is not over,’ the TreppWire report says. ‘The CRE bulls, however, can point to the fact that the September increase in the delinquency rate is the second smallest for 2010.’
The average monthly increase for the past 12 months has been 33 bps. The increase for seriously impaired loans – i.e., 60+ days delinquent, in foreclosure, bank-owned or nonperforming balloons – was slightly larger, at 16 bps. The percentage of seriously impaired CMBS loans at the end of September was 8.31%.
By property type, hotel and retail properties led the way in delinquencies, with increases of 41 bps and 37 bps, respectively. Hotel CMBS delinquencies were at 19.33% at the end of September (the highest among major property types), with retail CMBS delinquencies hitting 7.13%.
Multifamily and industrial delinquencies fell 10 bps and 8 bps, respectively, with industrial continuing to be the best performer among major property types, Trepp reports.