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Trepp Report: CMBS Delinquency Rate Continues to Fall
CMBS delinquencies dropped again in January, according to new data from Trepp, who notes it is the seventh straight month the rate has fallen. The delinquency rate for commercial real estate loans in CMBS in the U.S. now sits at 4.83%, a decrease of six basis points from what it was in December 2017.
By comparison, the delinquency rate moved up in 13 of the 16 months between March 2016 and June 2017. Since then, as most of the bubble-year loans from 2006 and 2007 moved passed maturity dates and have been resolved, the delinquency level has receded. That means there is a fairly decent clip of resolution going on with fewer defaults on bubble-year loans and those that did default are being resolved, albeit often with losses. Since June 2017, the Trepp CMBS Delinquency Rate has fallen by 92 basis points.
Interestingly, the January rate could have experienced a slight swell, since there were actually more new delinquencies in January than loans that were cured and resolved. Trepp notes that a surge of new issuance in the second half of 2017 substantially helped increase the number of performing loans.
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