The delinquency rate for commercial real estate in CMBS went up 12 basis points in July, the smallest rise in over a year and slightly smaller than June’s increase of 17 basis points.
The upward trend brings the current delinquency rate to 8.71%, according to the monthly delinquency report by Trepp.
For the 10 months prior to July, the rate of delinquency increase had averaged 37 points per month, Trepp’s report indicated.
The rise in loans 60 or more days delinquent increased only slightly as well, rising 12 basis points to 7.95%, an increase on track with the rest of the market. Trepp’s report suggested that an increased rate of loan modifications in 2010 has put downward pressure on the delinquency rate, as troubled loans have been resolved and moved from the delinquency category.
Loan modifications this year have already surpassed the total amount completed in 2008 and 2009 combined and is set to triple the total rate done in 2009, Trepp reported.
The delinquency rate was 3.71% one year ago and 6.49% six months ago. Meanwhile, the delinquency rate for seriously delinquent loans was 3.07% one year ago and 5.67% six months ago. Although the monthly increase was small, July’s figures once again show the highest delinquency rate in CMBS history, according to Trepp.
Hotel delinquencies fell the 60 basis points in July, but at 18.41%, the sector still represents the highest delinquency rate of the major property types.
The delinquency rate for multifamily properties was down nine basis points to 14.00%, the second highest among property types.
Office delinquencies increased 31 basis points to 6.35% and the rate for retail properties jumped 22 basis points to 6.90%.
The delinquency rate for industrial properties increased 56 basis points to 6.04%, but is still the best performer among the major property types, Trepp reported.