2.1.11: Trepp Reports Delinquency Rate Reaches Another Record High

On the heels of a CMBS industry conference where cautious optimism was the common theme, and a week in which several new CMBS deals were announced, a record setting delinquency rate of 9.34% for January indicates that the CMBS market still has some ground to make up, according to a report from Trepp.

In January, the delinquency rate for U.S. commercial real estate loans in CMBS jumped 14 basis points (bp) to 9.34%. That is the highest percentage of loans 30-plus days delinquent, in foreclosure or REO in the history of the CMBS market.

Period % 30 Days
or More Delinquent

Jan-11 9.34
Dec-10 9.20
Nov-10 8.93
3 Months Ago 8.58
6 Months Ago 8.71
12 Months Ago 6.49

While the rate continues to head higher, optimists can point to the fact that the rate of increase is significantly smaller than it was in the prior two months. In November, the delinquency rate stepped up 35 bp from October, and in December it was up 27 bp from November. Pessimists can counter with the fact that the jump comes despite the fact that new issues continue to make their way into the calculation and servicers continue to resolve troubled loans. The new deals – which theoretically should have low delinquencies for a while – will continue to put downward pressure on the rate as issuance continues to grow in 2011. Similarly, the resolution of troubled loans will also help to reduce the rate.

Property Type Jan-11
3 Months Ago
6 Months Ago
12 Months Ago
Industrial 10.12 6.27 6.04 4.54
Lodging 15.08 14.92 18.41 15.32
Multifamily 16.85 14.63 14.00 9.71
Office 6.88 6.68 6.35 3.90
Retail 7.72 7.17 6.90 5.69


This entry was posted in CMBS, Commercial Real Estate Loans, Michael D. Sneden, Valuexpress and tagged , . Bookmark the permalink.

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