The delinquency rate of securitized commercial real estate loans dropped sharply in January down to the lowest level in 11 months mostly due to improvements in the performance of multifamily loans.

Following a relatively stable fourth quarter of 2012, according to Trepp, the U.S. CMBS delinquency rate fell 14 basis points to 9.57%.

Currently there are $52.8 billion in delinquent loans, which excludes loans that are past their balloon date but current on interest payments.

The rate of seriously delinquent loans has not improved—six months ago it was 9.8%, up from 8.96% in January 2011—so the cure and resolve rates will further affect the rate going forward.

A total of 3,300 loans that represent $67.3 billion are under special servicing.

During most of 2012 the delinquency rate fluctuated before resuming a more coherent decline that started in August.

At roughly 9.7% during most of 2012, the rate was higher than its lowest reading since February 2012 when it was 9.38%. Findings are consistent with last month’s forecast. As special servicers continue to resolve nonperforming loans and as new CMBS deals are added to the index, Trepp said, the forward-looking data point to lower delinquency rates over the near term.

The report shows improvements are still marginal as $2.8 billion in newly delinquent loans reported in January pressured the delinquency rate up by about 50 bps.

However, January marked the second straight month when new delinquencies “decreased significantly,” marking further month-over-month improvements deriving from “a slight bump” in loan resolutions.

Over $1.2 billion in delinquent loans were resolved—bringing monthly losses down by 22 bps—compared to $1.1 billion in December.

An additional decrease of 40 bps resulted from loans that were cured in all five major property groups.

Multifamily loan delinquencies featured the largest improvement dropping by 55 bps in January compared to December.

The performance of office loans also improved, while the rates on the other major property types—industrial, lodging and retail—were modestly higher inching up by 8 bps, 4 bps and 17 bps, respectively.


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