The U.S. delinquency rate for commercial real estate loans in CMBS experienced its biggest decrease in two years, falling by 5 basis points to 9.60% in May, according to figures reported by Trepp LLC.
“Last month, the delinquency rate posted its biggest rate of increase since late 2010 - a 23 basis point jump,” said Manus Clancy, Managing Director of Trepp. "The increase took many CMBS pros by surprise as it came after three consecutive months of improving results. While there may be additional bumps along the way, we think the May numbers accurately reflect a levelling off in the market.”
The Office sector continues to be the best performing major property type at 7.23%, despite its month-to-month increase of 3 basis points.
Despite the positive results, the percentage of seriously delinquent loans, defined in by Trepp as loans that are 60+ days delinquent, in foreclosure, REO or non-performing balloons; was up 6 basis points at 8.96%.
The industrial delinquency rate continued to deteriorate as the delinquency rate in this sector increased 120 basis points in May, reaching almost 12%. Six months ago the same rate was reported at just under 7%. The Multifamily sector remains the worst performing major property type with a delinquency rate of 16.71%, after suffering a drop of 6 basis points in May.
All other major property types experienced declining delinquency rates for the month.