The increase in delinquencies on commercial mortgage-backed securities has slowed over the past two months with some analysts hoping the worst might be over for the sector.
Trepp LLC reported that the 30-day plus delinquency rate on CMBS rose only 17 basis points in June and 12 basis points in July. The resulting 8.7% delinquency rate in July is still the highest in CMBS history.
Nevertheless, Trepp analysts said the numbers are "encouraging, giving the market hope that the darkest days for the CMBS market" could be over.
The Trepp analysts attribute some of the improvement to a dramatic increase in loan modifications this year.
The New York firm tracks the performance of lodging, multifamily, industrial, office and retail CMBS. The multifamily and lodging sectors have the worse-performing mortgages, but both registered a decline in delinquencies in July. But the past due rate on mortgages in the other sectors moved higher.
The delinquency rate on securitized multifamily mortgages fell 9 bps in July to 14% — after jumping 75 basis points in June. A year ago, the delinquency rate was 5.72%.
The multifamily delinquency rate spiked 330 basis points in the month of March to 13.2% — but a large chunk of that was due to the default of the Stuyvesant Town and Peter Cooper Village project in Manhattan.
