The delinquency rate for U.S. commercial real estate loans in CMBS increased by eight basis points in March to 9.50% after reaching the lowest level in a year last month, according to Trepp.
However, CMBS delinquencies overall, have fallen 84 basis points since hitting its all-time peak of 10.34% at the end of July 2012.
“A close examination of the data reveals that the weakening experienced in March is not nearly as worrisome as it seems,” said Manus Clancy, senior managing direction of Trepp. “The jump in the rate was caused primarily by a reversal of status of a number of floating rate hotel loans.”
The Lodging sector saw a 174 basis point weakening between February and March, according to Trepp’s March 2013 U.S. CMBS delinquency report.
In February, Trepp reported that hotel loans posted a 169 basis point drop in delinquency rate to 10.08% but noted that many of the largest loans that cured were loans that went from “non-performing matured balloons” to “performing matured balloons.”
The increase in March is attributed to some of these loans flipping back to non-performing.
The report showed an overall $2.8 billion in newly delinquent loans reported last month, up slightly from the previous month. However the jump in delinquent loans was mainly
There are currently $52.1 billion in U.S. CMBS loans 30 or more days delinquent, excluding loans that are past their balloon date but current on interest payments. Nearly 3,300 loans totaling $64.8 billion are currently in special servicing.
Loan resolutions continued to drop in March, falling from just under a billion dollars in February to almost $850 million.
The delinquency rate for apartment loans continued to improve in March, dropping another 54 basis points to 12.73%. The rates for industrial and office loans also decreased to 11.72% and 10.6% respectively.
Retail loans posted the second worst month-over-month reading with an increase of 12 basis points.