CMBS delinquency rate sees biggest jump in nearly three years

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Delinquencies in U.S. commercial mortgage-backed securities jumped in April, with the economy battered by the coronavirus pandemic.

The CMBS delinquency rate, which measures payments that are late for more than 30 days, climbed 22 basis points to 2.29% in April, the biggest jump since June 2017, according to data firm Trepp. Lodging and retail loans were among the hardest hit.

The situation could get much worse. About 7.6% of loans were late on April 1 payments but don't yet classify as delinquent, according to Trepp.

If the debt remains unpaid in May, the overall delinquency rate would climb above 10%, the firm said. The record for the metric was 10.34% in July 2012. The data goes back about 22 years.

U.S. commercial real estate has been battered by the social-distancing guidelines put in place in March, with hotels and retail stores in particularly bad shape.

Bloomberg News