Delinquency rates for CMBS real estate loans dropped in October according to industry analysts Trepp
Delinquency rates for CMBS real estate loans dropped in October according to industry analysts Trepp.
Its CMBS Delinquency Rate measure dropped to 5.2%, down 19 basis points from September which is the second largest rate drop in 19 months. Although it is 23 basis points higher than October 2016, it should hail the start of a downward trend Trepp says.
There was sharp rise in the delinquency rate in the wake of the financial crisis as many loans originated in 2006 and 2007 reached maturity but were not refinanced.
With this wave of loans ended it means an environment where the rates can continue to decrease.
The share of loans that were seriously delinquent was 5.12%, up from 4.87% a year ago but down 12 basis points in the month.
The hotel loans segment saw the largest drop in CMBS delinquencies, of 42 basis points to 3.42$; industrial was down 31 basis points to 6.24%; offices down 18 basis points to 6.92%; and multifamily down 2 basis points to 2.98% with apartments the best performing property type in this sector.
Prices ease
The price of loans underlying CMBS also trended lower according to the September figures from marketplace DebtX.
The estimated price of whole loans securing the CMBS universe decreased to 97.6% from 98.7% at the end of August 2017 as Treasury yields increased. Prices were 99.8% in September 2016.
DebtX priced $1.62 trillion in commercial real estate loans that collateralize US CMBS trusts as of the end of September.
The median adjusted loan-to-value remained at 58%, and the median debt service coverage ratio was unchanged at 1.52. The median estimated loan yield increased to 4.2%.
Its CMBS Delinquency Rate measure dropped to 5.2%, down 19 basis points from September which is the second largest rate drop in 19 months. Although it is 23 basis points higher than October 2016, it should hail the start of a downward trend Trepp says.
There was sharp rise in the delinquency rate in the wake of the financial crisis as many loans originated in 2006 and 2007 reached maturity but were not refinanced.
With this wave of loans ended it means an environment where the rates can continue to decrease.
The share of loans that were seriously delinquent was 5.12%, up from 4.87% a year ago but down 12 basis points in the month.
The hotel loans segment saw the largest drop in CMBS delinquencies, of 42 basis points to 3.42$; industrial was down 31 basis points to 6.24%; offices down 18 basis points to 6.92%; and multifamily down 2 basis points to 2.98% with apartments the best performing property type in this sector.
Prices ease
The price of loans underlying CMBS also trended lower according to the September figures from marketplace DebtX.
The estimated price of whole loans securing the CMBS universe decreased to 97.6% from 98.7% at the end of August 2017 as Treasury yields increased. Prices were 99.8% in September 2016.
DebtX priced $1.62 trillion in commercial real estate loans that collateralize US CMBS trusts as of the end of September.
The median adjusted loan-to-value remained at 58%, and the median debt service coverage ratio was unchanged at 1.52. The median estimated loan yield increased to 4.2%.
