NEW YORK CITY—CMBS delinquencies declined again in January, marking the seventh consecutive month of improvement, Trepp LLC said Wednesday. The delinquency rate for US securitized commercial mortgages is now 4.83%, a decrease of six basis points from December and 35 bps from a year ago.
“The delinquency rate has now decreased in each month since June 2017,” Trepp reported Wednesday. “At the time, we predicted that further rate declines were possible in the following months as the Wall of Maturities neared its end. We stand by that call and believe that further reductions could be in the cards in the coming months.”
In fact, new delinquencies outnumbered resolutions in January. Nearly $1.35 billion in loans became newly delinquent during the month, compared to about $800 million of loans that were resolved at par or at a loss, and another $290 million of loans that were cured. However, Trepp says the surge of new CMBS issues in the second half of '17 helped increase the number of performing loans substantially.
Two of the five major property types experienced delinquency increases during January. Hotel CMBS registered 69 bps of upward pressure on delinquencies, although the sector remains the second best performer with a late-pay rate of 4.51%. Retail, the month's worst performing property type, saw a 17-bp increase in delinquencies to 6.3%.
On the other side of the ledger, the worst performing property type in December—office—improved by 56 bps to 5.84%. Industrial delinquencies declined by seven bps to 5.6%, while multifamily continued to be the best-performing property type, with delinquencies shedding a further 28 bps to end January at 2.08%.
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
