Trepp: CMBS Delinquency Rate at High, But May Drop Soon


CMBS loans 30-plus days delinquent continued their steady upward march in June, rising to a new all-time high of 10.16 percent for the month of June 2012, according to Trepp. As of now, $59 billion in the loans are delinquent, excluding loans past their balloon dates but current in interest payments.

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Driving the upward trend are the huge numbers of CMBS loans packaged and issued in 2007.

manus clancy feb2010 Trepp: CMBS Delinquency Rate at High, But May Drop Soon
Manus Clancy.

“The soaring temperatures across the U.S. made for a very uncomfortable June in many places, said Trepp senior managing director Manus Clancy. “With the level well over 10 percent now, the delinquency rate is equally uncomfortably high for CMBS investors. Driving the rate up has been the fact that only 28 percent of the loans from 2007 due to mature in 2012 managed to pay off in full. Just as the heat should break by September, investors should see some relief, too.  Now that most of the 2007 loans coming due in 2012 have passed their maturity date, the delinquency rate should start to level off soon.”

In June, the Mortgage Bankers Association also noted that the delinquency rate for CMBS was continuing to rise—a phenomenon that the group charted over the first quarter of 2012. Meanwhile, the rate for commercial and multifamily was a bright spot and declined, the association said.

This continued to be the case in Trepp’s findings as well. Multifamily delinquency rates were unchanged for June and held steady at 15.17 percent compared to the month previous. Loans resolved with losses declined during the same period. In June, $1.4 billion in the resolutions were seen, down from $1.6 billion the previous month. However June saw nearly $4.5 billion in newly delinquent commercial real estate loans.