The securitized commercial mortgage delinquency rate tracked by Trepp has fallen for two months in a row for the first time since the credit crisis began in 2008, but it stems primarily from delinquent loans resolving with losses rather than curing.
Overall, 30 days-plus delinquencies in June fell to 9.37% from 9.6% in May, a move that was sharper than the previous month-to-month decline from 9.65% in April, Trepp said in a report Wednesday. This is the lowest overall securitized commercial mortgage delinquency rate since February.
In line with the overall trend, multifamily-only 30-plus day delinquencies dropped to 16.48% in June from 16.71% in May. This was more pronounced than the month-to-month decline to 16.71% in May from 16.77% in April. But multifamily continues to be the worst performing property type.
Office was the only major property type tracked by Trepp that did not improve between May and June, but it remains the best-performing property type. Between these two months, its 30 days-plus delinquency rate climbed to 7.35% from 7.23%.
In another section of its report summarizing commercial mortgage-backed securities market trends as of the end of June, Trepp noted that prices over the course of the quarter ending that month were somewhat volatile but ended with a relative rally.
International concerns, signs of domestic economic weakness and excess supply from the Fed’s Maiden Lane paper during the second week of June were sources of volatility. Trepp noted that while there has been some recovery since then there are still pockets of distressed pricing.
