Distressed legacy loans being resolved at brisk pace
The delinquency rate for all major properties in Commercial Mortgage Backed Securities showed improvement in April.
The overall delinquency rate for CMBS properties was 4.36%, down 19 basis points from a month earlier, according to the latest data from analysts at Trepp.
The rate had increased in March after eight months of declines but the downward trend has resumed.
“The delinquency rate continues to fall as expected,” said Trepp Senior Managing Director, Manus Clancy, “with distressed legacy loans being resolved away at a brisk pace and newly originated loans being added to the mix. We wouldn't be all that surprised if a new post-crisis low for the delinquency rate came before the end of the summer.”
The industrial sector posting the largest month-over-month drop, with its delinquency rate plunging 78 basis points to 4.53% last month. Hotel delinquencies also dropped notably, falling 37 basis points to 2.98%. The office delinquency rate shed 23 basis points to 5.57% in April.
The CMBS 2.0+ delinquency rate was 0.55% in April, unchanged from March while the percentage of seriously delinquent 2.0+ loans climbed 12 basis points higher to 0.51%.
The delinquency reading for the CMBS 1.0 universe was 47.41% in April, down 43 basis points from March. The percentage of 1.0 loans that are seriously delinquent also fell, by 36 basis points to 47.26%.
