Late payments on securitized U.S. commercial mortgages fell modestly in November, marking the fifth straight month in which the reading has dropped.

The Trepp CMBS delinquency rate is now 5.18%, a decrease of three basis points from the October level.

About $1.1 billion in loans became newly delinquent in November, which put 27 basis points of upward pressure on the delinquency rate. A little more than $300 million in loans were cured last month, which reduced the delinquency rate by eight basis points. About $900 million in previously delinquent CMBS loans were resolved with a loss or at par in November. Those resolutions shaved 22 basis points off the November reading.

The decrease was limited to three property types — industrials, multifamily and offices. Late payments on two other property types, retail and hotels, actually increased.

Nevertheless, Trepp sees more room for the overall delinquency rate to continue to decrease.

“In the beginning of the summer, we noted that further rate declines were possible in the following months," the company stated in its monthly report. “Now that delinquencies have fallen in each of the last five months, we can safely call that a trend. As fewer 2006 and 2007 loans reach their balloon dates and more distressed loans are resolved, the delinquency rate should continue to trend even lower.”

The November 2017 rate is only 15 basis points higher than the year-ago level and five basis points lower than what the rate was at the beginning of the year.

The reading hit a multiyear low of 4.15% in February 2016. The all-time high was 10.34% in July 2012.

After hitting a post-crisis low in February 2016, the reading climbed steadily for more than a year as loans from the "bubble" years of 2006 and 2007 reached their maturity dates and were not paid off. The delinquency rate moved up 13 times in the 16 months between March 2016 and June 2017. However, the delinquency level has receded since June as bubble-year loans have passed their maturity date and been resolved.

“Put another, simpler way, fewer loans are defaulting and those that defaulted in recent years are being resolved away (often with losses),” the report states.

By property type, the office delinquency saw the biggest decline, by 42 basis points to 6.5%. The multifamily delinquency rate dropped 27 basis points to 2.71%; apartment loans remain the best-performing major property type. The industrial delinquency rate fell 14 basis points to 6.1%. The delinquency reading for hotel loans increased 21 basis points to 3.63%. The retail delinquency rate moved up 32 basis points to 6.79%.

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