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Morningstar: CMBS Delinquency Rate Inches Up
Morningstar Credit Ratings’ March commercial mortgage-backed securities (CMBS) report reveals that the delinquency rate inched up to 2.35%, after receding to a post-crisis low last month. That was a modest 3 basis points increase from February, but is 70 basis points lower than it was a year ago.
With steady new issuance volume pushing the outstanding balance of CMBS loans, and special servicers actively resolving or liquidating assets, Morningstar researchers believe the delinquency rate will hold below 3% for the rest of the year.
Delinquencies from deals issued from 2010 through 2018 remain a small portion of the total, representing just 0.34% of the CMBS universe, while delinquent pre-crisis loans account for 2.01% of the CMBS universe.
The payoff rate of maturing loans in CMBS dipped below 75% for the second time this year, declining to 74.3% in March from 87.3% in February. Morningstar anticipates that the maturity payoff rate will rebound and finish the year in the 80% to 85% range, as most of the remaining maturing loans have strong metrics.
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