
CMBS DQ Rate Drops Sharply in October
The CMBS delinquency rate dropped sharply in October, marking the fourth straight month in which it has fallen, according to research by Trepp. The delinquency rate for US commercial real estate loans in CMBS is now 5.21%, a decrease of 19 basis points from the September level.
Trepp points out that is the second largest rate drop measured in the last 19 months.
After hitting a post-crisis low in February 2016, the reading climbed consistently for more than a year, as loans issued in 2006 and 2007 reached their maturity dates and were not paid off via refinancing. Between March 2016 and June 2017, Trepp reported the delinquency rate moved up 13 times. However, now that the dreaded “wave of maturities” has passed, delinquency levels have receded as well.
Rates for all five major property types improved in October, and the delinquency rate is expected to continue to trend lower as loans reach their balloon dates and more distressed loans are resolved.
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