After two straight months of improvements, the commercial mortgage-backed securities delinquency rate is under 10% for the first time since April, according to Trepp.
In September, commercial real estate loans in CMBS that were delinquent by at least 30 days or in foreclosure fell 14 basis points from the previous month to 9.99%. This latest decrease follows a 21 basis point drop that occurred in August, which was the largest one-month drop since November 2011.
Excluding loans that are past their balloon date but are current in their interest payments, there are currently $56.3 billion in delinquent loans.
Over 3,800 loans are with special servicers, Trepp said, totaling $72.3 billion.
An uptick in loan resolution helped the delinquency rate fall again. Over $1.77 billion in loans resolved with losses in September, up from $1.5 billion the previous month.
Trepp expects this downward trend in the
First, because the inventory of distressed real estate is so high and borrowing costs remain extremely low, Trepp sees no reason why the volume of loans being resolved each month will drop. Therefore, special servicers will be able “to operate at a high speed for the foreseeable future,” Trepp said.
Secondly, due to a revival over the last three months in new CMBS issuances, Trepp’s outlook for securitization volume over the next six months has altered.
“Given that we include new deals in our numbers (six months after issuance), and new deals tend to perform extremely well, the new loans should dilute the bad legacy loans that still exist,” the New York-based analytic firm said.
