The delinquency rate for loans in commercial mortgage-backed securities (CMBS) rose 21 basis points (bps) to 8.92% in August, according to Trepp's monthly delinquency report. The jump in delinquencies may dash hopes that commercial mortgage performance is on the verge of stabilization.
Relative to earlier this year, the CMBS delinquency rate had moderated in June and July. In July, the delinquency rate only went up by 12 bps.
‘The August numbers may give ammunition to those who argue that the commercial real estate crisis is far from over,’ the Trepp report, published Tuesday, states.
At nearly 9%, the delinquency level has again hit a historical high for the CMBS industry. Removing defeased commercial real estate loans from the equation, the delinquency rate would be 9.49%, Trepp says.
Trepp also reports that loan modification activity ‘remains elevated.’
Of the major property types Trepp tracks, only retail improved in performance. The 30+ delinquency rate for retail properties fell from 6.9% in July to 6.76% in August. Lodging continues to be the worst-performing sector (14.53% delinquency rate last month), and industrial continues to be the strongest performer (6.56% delinquency rate).