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CMBS Delinquencies Ebb Further in August
The CMBS delinquency rate reached recent lows in August, according to both Trepp and Fitch Ratings. Trepp’s figure of 2.98% was the lowest delinquency rate since before the pandemic began, while delinquencies for Fitch-rated CMBS fell below 2% to 1.97%, a drop of eight basis points from July.
Fitch attributed the 8-bp drop to an increase in resolutions last month, notably in hotel and retail. In all, $1.1 billion of Fitch-rated CMBS loans was resolved in August, compared to $685 million in July. Multifamily and industrial saw slight increases in delinquencies during August, while all other property types improved, according to Fitch.
“The declines should not be terribly shocking to players in the CMBS market,” wrote Manus Clancy, senior managing director at Trepp. “Those property segments that were crushed by the COVID-19 pandemic – hotel and retail – continue to see steady improvement each month as loans in those categories cure and/or pay off.”
Conversely, he added, “distress in the office segment – the property type most likely to be impacted by increased work-from-home trends – will take years to play out as a result of most firms being locked into five- and 10-year leases.”
- ◦Financing
