The delinquency rate for U.S. commercial real estate loans in CMBS fell in June by 23 basis points to 9.73%, its lowest level since February 2011, according to a report by Trepp.
This marks the first time in almost three years that the sector has experienced two consecutive months of falling delinquency rates, following a five-basis-point decline in May.
Trepp said that the decrease might have been fueled by the liquidation of $1.8 billion worth of loans in June. The report stated that it is the highest total recorded since Trepp began monitoring the loss resolution data 18 months ago.
The exit of these distressed loans from the pool accounted for a 28 basis point reduction in delinquencies, according to the report, with the remaining loans actually experiencing a five-basis-point rise to bring the net decline to 23 basis points overall.
Despite the declines, the overall delinquency rate is well above the June 2010 level of 8.59%, but is moving closer toward the 9.20% rate recorded six months ago.
Additionally, the percentage of loans seriously delinquent decreased by 21 basis points to 8.75%.
Trepp reported that the delinquency rate for all major property types fell in June, with the exception of the office sector. Despite a rise of 12 basis points, it remains the best-performing major property type at 7.35%.
Conversely, Trepp reported a plunge of 150 basis points in the lodging delinquency rate to 13.87%, as the rates for industrial, multifamily, and retail experienced more modest declines of 28, 23, and 12 basis points respectively.
Despite the improvement, multifamily continues to be the worst-performing major property type with a delinquency rate of 16.48%.