The delinquency rate for U.S. commercial real estate loans in commercial mortgage-backed securities fell 26 basis points (bps) to 9.51% in November, according to new data from Trepp LLC. This marks the second biggest drop in 2011, surpassed only by August's 36-point drop.
According to Trepp, the rate has now fallen in four of the 11 months of 2011. The value of delinquent loans is now $58.5 billion.
By property type, the hotel delinquency rate dropped 184 bps to 12.28%. The industrial delinquency rate jumped 61 bps to 12.20%, threatening to pass lodging as the second worst-performing property type. The office delinquency rate was down 19 bps, to 8.76%, while the multifamily delinquency rate dipped 55 basis points to remain the worst performing major property type with a rate of 16.18%. The retail delinquency rate tightened 9 bps to 7.52%, remaining the best major property type.
‘It is quite possible that this will represent the best reading for a while,’ says Manus Clancy, senior managing director of Trepp. ‘With the first of the dreaded 2007 vintage loans starting to mature, severe upward pressure will be put on the rate over the next few months. Even if the 2007 vintage is only 'as bad' as the 2006 vintage has been, the rate could easily go up 75 bps. So for now, further improvements in the delinquency rate could be elusive.’