NEW YORK CITY-In a sign that the troublesome class of 2007 loans have not yet made the grade, the CMBS delinquency rate has hit a new high in May after steadily creeping up over the last three months. New research from Trepp shows that the delinquency rate is now 10.04%, up 24 basis points from last month (9.8%) and a whopping 67 basis points since February (9.37%), an indication that the rocky CMBS market has not yet reached solid ground.

“It is definitely not exactly as we and others have thought over the last three or five months,” Manus Clancy, senior managing director at Trepp, tells GlobeSt.com, who predicted earlier in the year that the market could easily see a spike of 70 basis points in the short-term, as five-year loans that were securitized in 2007 began to reach their maturity dates. The good news, he says, is that these loans were “heavily” front-loaded.

“We should see another month or two where we kind of bump along in a negative direction, but after that, we should start seeing the delinquency rate start to level off beginning in the middle of the summer,” he says, noting that the rate could continue to edge up in the next couple of months, but “should see a leveling off in the second half of the year.”