The Trepp CMBS delinquency rate dropped sharply in October, marking the fourth straight monthly decline. The delinquency rate for U.S. commercial real estate loans in CMBS is now 5.21%, down 19 basis points from the September level. That is the second-largest rate drop measured in the last 19 months. One year ago, the overall 30-day delinquency rate was 4.98%. The delinquency rate had been climbing consistently for more than a year as loans issued in 2006 and 2007 reached their maturity dates and were not paid off via refinancing. In the 16 months between March 2016 and June 2017, the delinquency rate moved up 13 times. However, now that the dreaded “wave of maturities” has passed, delinquency levels have receded as well.
Trepp notes that further declines in the overall reading are possible in the coming months as fewer 2006 and 2007 loan reach their maturity dates and more distressed loans are resolved.
Vacancy by Property Type – October 2017