The Trepp CMBS Delinquency Rate posted a 42-basis-point drop to 8.65% in June, the lowest level in almost three years.
Trepp said today that the decline in the delinquency rate is the second biggest one-month improvement since it began publishing the monthly rate in the fall of 2009. June was the first time the rate has dropped below 9% since November 2010 and the lowest percentage since October 2010.
Driving the rate down last month was over two billion dollars of loan resolutions, which rose sharply from May’s total of $858 million.
Trepp said that one large office loan that had been listed as late in May was marked as current again last month, contributed a 13 basis points drop in the delinquency rate.
“The plunge in the delinquency rate was indicative of continued strength in the commercial real estate markets,” said Manus Clancy, senior managing director of Trepp. “However, by the end of June, investors were asking themselves if this is it for the time being.”
The rise in interest rates and CMBS spreads in June removes two of the big drivers of CRE gains over this past year. “Over the next six months, investors will get a good sense of just how enduring the gains of the last 12 months might be,” said Clancy.