CMBS Delinquency Rate Continues Long, Downward Trajectory in April: Trepp


“The Trepp commercial mortgage-backed securities (CMBS) delinquency rate continued its downward trend in April with recent economic data pointing to robust growth across a wide range of sectors, although the rate of improvement has slowed compared to earlier this year,” wrote Manus Clancy, a senior managing director at research firm Trepp. “Back in February, the reading fell an impressive 78 basis points over the January number, its largest decrease since the beginning of the pandemic.

“After two huge jumps in May and June, the rate has now declined for 10 consecutive months. The Trepp CMBS delinquency rate in April was 6.52 percent, a drop of six basis points from the March number. The percentage of loans in the 30 days delinquent bucket is 0.66 percent, down four basis points for the month.

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“In terms of loans in a grace period, 2.25 percent of loans by balance missed the April payment but were less than 30 days delinquent. That was up 33 basis points for the month.

“The percentage of loans with the special servicer fell to 9.02 percent in April from 9.39 percent in March. According to April servicer data, 21.8 percent of all lodging loans were in special servicing representing a decline of more than 2 percent in April. In addition, 15.9 percent of retail loans were with the special servicer, down from 16.1 percent in March.

“By property type, the multifamily sector posted the largest change in the delinquency reading with a decline of 86 basis points to 2.28 percent. Lodging (15.65 percent) and retail (10.83 percent) showed modest changes with an improvement of 30 basis points and six basis points, respectively.

“The $330 million loan backed by Union Station in Washington, D.C. (US 2018-USDC), which reverted back to 30 days behind payment in April, was the largest new addition the delinquency list. Recent special servicer comments indicate the borrower had failed to provide required funds to exercise a deferral of payment obligations that was originally supposed to begin with the March 2021 payment.

Other large loans that became newly delinquent last month include the $127.7 million loan behind the Deerbrook Mall in Humble, Texas (MSC 2011-C2), the $85 million loan backed by the EpiCentre in Charlotte (GSMS 2014-GC22), and the $65 million loan behind the Hyatt Regency Jersey City (CGCMT 2016-P5). In the case of the Deerbrook Mall and EpiCentre assets, both loans have entered foreclosure proceedings, according to servicer data.”