The delinquency rate for U.S. commercial real estate loans in commercial mortgage-backed securities (CMBS) fell 6 basis points (bps) to 9.52%, according to data from Trepp LLC, which also noted that long-held fears of problems related to loans originated before the 2008 financial crisis would create new problems.
‘The class of 2007 loans that ballooned in January did not fail to disappoint,’ according to a Trepp press statement. ‘Only 27 percent of these loans managed to pay off. In fact, if one removes a big Manhattan office loan that was refinanced with the help of a borrower that funded the cash shortfall, the total payoff percentage would have only been 15 percent.’
Over $5 billion in loans became delinquent in January, but this number was counterbalanced by the over $3 billion in loans that cured this past month. The percentage of loans seriously delinquent – 60-plus days delinquent, in foreclosure, real estate owned or nonperforming balloons – is now 8.96%, down 10 bps.
Across the various commercial property types, the multifamily delinquency rate dipped 18 bps and remained the worst major property type, with a delinquency rate of 15.39%. The Lodging delinquency rate was down 11 bps to 12.09%, while the industrial delinquency rate was up 11 bps. The office delinquency rate dropped 7 bps to 8.9% and the retail delinquency rate increased 3 bps to 7.88%.