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CMBS Delinquency Rate Continues to Decrease: Trepp

DEC 3, 2013 4:48pm ET
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The overall commercial mortgage-backed securities delinquency rate improved for the sixth consecutive month in November, according to Trepp.

The percentage of U.S. commercial real estate loans 30 or more days delinquent or in foreclosure is 7.66%. This figure was 7.98% the previous month and 8.14% a year ago. The CMBS delinquency rate has dropped 268 basis points since reaching an all-time high of 10.34% in the summer of 2012.

Overall, there are currently $41.3 billion in delinquent CMBS loans nationwide, Trepp says. Special servicers have $49.6 billion in commercial real estate loans—just over 2,800—within their portfolios.

Loans that cured in November totaled about $2.2 billion, which resulted in 40 basis points of downward pressure on the delinquent loan percentage.

Another factor contributing to the rate decrease was that almost $1.2 billion in previously delinquent loans were resolved with losses. By removing these loans, the rate saw 22 basis points of improvement.

Meanwhile, loans that were delinquent but paid off without a loss in November totaled approximately $245 million. This caused a five-basis point drop in the delinquent loan percentage.

The rate will fall even further as special servicer CWCapital is expected to sell more than $3 billion of distressed assets and additional note sales from its portfolio.

“Removing over $3 billion of nonperforming assets from the delinquent loan category would result in a 50 basis point decrease in the rate, so a delinquency rate that threatens the 7% level may not be out of the question,” New York-based Trepp said in a press release. “Regardless of whether these sales hit in December or January, the CMBS delinquency rate should continue to improve in the near-term.”

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