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S&P: CMBS delinquency rates declined in February

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CMBS delinquency rates declined in February, continuing a three-year trend of improving performance across numerous commercial mortgage sectors including multifamily, office and retail, according to S&P Global Ratings.

The monthly report stated the overall U.S. CMBS delinquency rate declined 10 basis points month-over-month to 1.43%, including to 0.46% for post-crisis CMBS transactions.

While the rate declined for multifamily (13 basis points), office (9 basis points) and retail properties (27 basis points), it increased for lodging (6 basis points) and industrial (2 basis points), S&P reported.

Since January 2017, the overall delinquency rate has declined about 288 basis points, or an average of 120 basis points year-over-year and 8 basis points from month-to-month.

The delinquency rate for CMBS 1.0 deals also declined in February, but the rate is much higher (31.13%) than newer vintage deals.

Although it is declining, the retail sector delinquency rate in commercial mortgage securitizations remains the most prominent, making up 45% of all delinquencies, followed by office properties (25%), and hotel/lodging (13%).

By dollar volume, the amount of delinquencies declined $4 billion to $8.4 billion in February.

S&P’s report noted 57 newly delinquent loans totaling $548.2 million in February, including 16 retail loans totaling $183.5 million, nine office loans totaling $47.1 million, and 17 lodging loans adding up to $183.1 million. Two industrial loans with a combined $43.9 million in balances also went delinquent.

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CMBS Delinquencies Retail industry Multifamily Commercial real estate lending