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Bank Delinquencies Recede; CMBS Late-Pays Follow

CHARLOTTESVILLE, VA—It's official. The commercial real estate lending market has returned to health, or at least is on the cusp of doing so, according to two separate reports, one by SNL Financial, the other by Chandan Economics. Both note that loan delinquencies are reaching post-crisis lows and that lending is increasing at a healthy clip.

By Erika Morphy and Paul Bubny | Updated on December 21, 2012

CHARLOTTESVILLE, VA—It’s official. The commercial real estate lending market has returned to health, or at least is on the cusp of doing so, according to two separate reports, one by SNL Financial, the other by Chandan Economics. Both note that loan delinquencies are reaching post-crisis lows and that lending is increasing at a healthy clip.

SNL reports that US commercial banks saw a 14-quarter low delinquency rate of 5.28% on commercial real estate loans as of the end of June, and the ratio of bad CRE loans has more than halved from the peak of 10.76% nine quarters ago. A number of banks, many based in California, have a clean bill of health now in terms of faulty CRE loans.

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