The U.S. CMBS delinquency rate declined sixteen basis points in June to reach 9.02%, according to Moody’s Investors Service’s Delinquency Tracker (DQT). The rate of loans in special servicing dropped for the second straight month with a decrease of 27 basis points, settling at 12.35%.
The $4.1 billion in resolutions of delinquent loans recorded in June, compared with $3.1 billion in new delinquencies, makes June the fourth consecutive month that resolutions have outnumbered new delinquencies. The total amount of delinquent U.S. CMBS loans is now $54.7 billion.
Multifamily and hotel properties experienced the largest declines in delinquency rates in June, but remain the worst performers at 15.13% and 15.76% respectively. The rate for retail properties also decreased, but only by a modest 15 basis points to 7.16%.
Conversely, industrial and office properties both slightly rose during the month by 11 and 17 basis points correspondingly.
Properties in the Western U.S. experience the largest drop in delinquency rates last month, falling 43 basis points to 8.73%. According to Moody’s, the Midwest’s was the only region to have an increased rate, slightly rising 6 basis points to 9.30%.
Despite falling only one basis point in June, the East remains the best performer. Conversely, the South continues to be the worst performer in spite of declining 14 basis points to 10.57%.
Moody’s analysts also noted that Nevada’s delinquency rate fell 200 basis points in June, but remains the worst-performing state with a rate nearly two and a half times the national average at 22.46%.
The figures paint a mixed picture for CMBS performance. “While this is the second consecutive month of decline for specially serviced loans, the 333 basis point spread to the delinquency rate indicates a likely continuation of elevated delinquency levels,” commented Moody’s director of CRE research Tad Philipp.
With $5.7 billion worth of legacy CMBS also exiting the sector during the month and four new CMBS deals totaling $6.2 billion also issued in June; the total amount of outstanding U.S. CMBS issuance now stands at $606 billion, according to Moody's figures.