The faith that investors have shown in the legacy U.S. CMBS market over the last few months was validated on Wednesday when the Trepp Delinquency Report reported that the core delinquency rate for February had one of its smallest increases since the beginning of the credit crisis.
In February, the delinquency rate for U.S. commercial real estate loans in CMBS edged up 5 basis points (bp), putting the rate at 9.39%. That is once again the highest percentage of loans 30-plus days delinquent, in foreclosure or REO in the history of the CMBS market. This 5 bp increase, however, is arguably the smallest increase since we started publishing numbers 18 months ago.
A dip in the delinquency rate occurred in October 2010 when the huge Extended Stay Hotel (ESH) loan was liquidated at a loss. If the ESH loan is removed from the equation, February’s 5 bp jump is the smallest in almost two years.
|Period||% 30 Days or More
|3 Months Ago||8.93%|
|6 Months Ago||8.90|
|12 Months Ago||6.72|
The rate of increase has averaged 23.8 bp per month over the previous 12 months (after backing out the Stuyvesant Town impact in March and the ESH impact in October). The percentage of loans seriously delinquent (60-plus days delinquent, in foreclosure, REO or non-performing balloons) is now 8.75%, up 16 bp. If defeased loans were taken out of the equation, the overall delinquency rate would be 9.90%, up 4 bp from January 2011. One year ago, the overall U.S. delinquency rate was 6.72%, while six months ago, the overall U.S. delinquency rate was 8.90%. One year ago, the rate of U.S. loans seriously delinquent was 5.97%, while six months ago, the rate of U.S. loans seriously delinquent was 8.14%.
|30 Days Delinquent||0.64|
|60 Days Delinquent||0.47|
|90 Days Delinquent||3.07|
|Performing Matured Balloon||0.39(1)|
|Non-Performing Matured Balloon||0.86|
|(1) Loans that are past their maturity date but still current
on interest are considered current.