U.S. CMBS Delinquency Rate Declines Sharply, Continues Year-Long Trend

Trepp, a provider of commercial mortgage-backed securities (CMBS) information, has released its September 2013 U.S. CMBS Delinquency Report.

The delinquency rate for U.S. commercial real estate loans in CMBS fell for the fourth consecutive month to 8.14%. The September delinquency rate marks a 24-basis-point decline since August's reading, as well as an improvement of 185 basis points from one year ago. This month's level is the lowest Trepp delinquency rate in three years since July 2010.

There were $1.7 billion in new delinquencies in September – a sharp decline from the $2.5 billion total from August. There are currently $44 billion in delinquent U.S. CMBS loans, excluding loans that are past their balloon date but current on their interest payments.

Leading to this month's improvement in the overall CMBS delinquency rate were $1.9 billion of loans that cured in September. Loan resolutions totaled just under $873 million for the month, which was one of the lowest levels seen in recent months. In August, loan resolutions totaled just over $1 billion.

‘The CMBS market managed to shrug off concerns over QE tapering, Syria and impending government budget issues in September,’ says Manus Clancy, senior managing director of Trepp. ‘Supporting the improvement in the rate was a slowdown in new delinquencies and the addition of new deals to the overall loan pool.’

Among the major property types, retail continues to be the best performer, while industrial remains the worst. The office delinquency rate showed the best month-to-month improvement, with a 29-basis-point drop, while lodging loans saw a 12-basis-point increase.

For additional details, request the September 2013 U.S. CMBS Delinquency Report here.


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