Trepp LLC said in a report today that November CMBS delinquency rates increased by 2 basis points, reversing a consecutive three month declining trend.
The delinquency rate for U.S. commercial real estate loans in CMBS increased to 9.71% last month. From July through October, the rate fell 65 basis points from an all-time high of 10.34% in July to 9.69% in October.
One of the main contributors to the rate moving up in November was an increase in newly delinquent loans. The Trepp report said that November saw around $3.7 billion of such loans, which compares to $2.6 billion in October.
The report said that over $1.7 billion in loans were resolved with losses during November, but the pressure delinquent loans put on the rate outweighed the sizeable amount of loan resolutions last month.
Among the major property types, lodging loans were hit particularly hard. Loans backed by hotels saw their delinquency rate jump 100 basis points in November, according to the report. Office properties also saw delinquency rates increase, while retail, multifamily and industrial loans all improved modestly.
“The market cooled off somewhat in November,” said Manus Clancy, senior managing director of Trepp. “After months of seeing spreads plummet and delinquency rates fall, both inched up in November. Despite the time-out, CMBS continues to be issued as feverish rate—so the enthusiasm for the asset class remains high.”
Analysts at Standard & Poor’s said today that they project the delinquency rate to fall 8bps on December remittance reports.