CMBS late pays fall in April to lowest level in almost 2 years
Late payments on securitized commercial mortgages declined in April to the lowest level in almost two years.
As distressed legacy loans continue to be resolved away (and new performing loans continue to be issued in their place), the overall Trepp CMBS Delinquency Rate resumed its decline after a brief timeout in March.
The overall delinquency rate for U.S. commercial real estate loans in CMBS is now 4.36%, a decrease of 19 basis points from the March level.
The percentage of loans that are seriously delinquent (60+ days delinquent, in foreclosure, REO, or nonperforming balloons) also declined by eight basis points to 4.31%.
In a press release, Trepp reiterated its prediction that the delinquency rate could fall through its post-crisis low set in February 2016 at some point this year. That level is now only 21 basis points away, so “it wouldn't be all that surprising if a new low came before your July 4th barbecue,” the report states.
The April 2018 rate is 116 basis points lower than the year-ago level. The reading hit a multiyear low of 4.15% in February 2016, and the all-time high of 10.34% occurred in July 2012. The rate is 53 basis points lower in the year to date.
By property type, the largest decline was in industrial property delinquencies, which fell 78 basis points to 4.53%.
The lodging delinquency reading dropped 37 basis points to 2.98%.
The office delinquency rate was down 23 basis points to 5.57%.
The multifamily delinquency rate slid 13 basis points to 2.26%. Apartment loans remain the best-performing major property type.
The retail delinquency reading inched two basis points lower to 5.97%.