The U.S. commercial mortgage-backed securities (CMBS) delinquency rate set an all-time high in July, moving up 18 basis points (bps) to 10.34%, according to new data from Trepp LLC. This latest move puts the delinquency level up 97 bps since February and makes July the fifth straight month in which the rate has increased.
Trepp estimates that $59.5 billion in loans are currently delinquent, and approximately $1.4 billion in loss resolutions were recorded in July. Trepp attributes the removal of these loans from the delinquent-loan category to roughly 24 bps of downward pressure on the delinquency rate. Loans that were cured put an additional 40 bps of downward pressure on the rate. However, loans that were newly delinquent – totaling about $4.6 billion – put upward pressure on the rate of about 81 bps.
The only major commercial property sector to show improvement in July was the retail loan segment, where the delinquency rate fell 14 bps to 8.03%. In contrast, the multifamily delinquency rate moved up 52 bps to 15.69%, while the office delinquency rate jumped 24 bps to 10.69%, the industrial delinquency rate increased 18 bps to 11.72% and the hotel delinquency rate increased by 11 bps to slightly above 13%.
‘We don't anticipate many more increases in the rate over the next six months, but we don't see a lot of improvement either,’ says Manus Clancy, senior managing director of Trepp. ‘The loans that were unable to refinance over the last year will continue to linger with the special servicers, much like motorists trying to get into London over the next two weeks.’