Balloon payments are beginning to take their toll on securitized commercial real estate loans, with delinquency jumping more than 30 basis points last month. Apartment loans were the worst performers, while mortgages on hotels have seen consistent improvement.
Loans included in commercial mortgage-backed securities had a 30-day delinquency rate of 9.68 percent in March. The aggregate principal balance of delinquent CMBS loans was $58.1 billion.
The past-due rate rose from February, when it stood at 9.37 percent.
Trepp LLC, which released the data Monday, said the increase reflected $5 billion in newly delinquent loans, which were partially offset by just $1 billion in loans resolutions.
Trepp previously reported that one-month delinquency on CRE loans was 9.42 percent a year earlier — the worst on record up to that point.
“We predicted late last year that the delinquency rate would rise largely on the impact of 2007 loans coming due, and today’s report underscores that forecast,” Trepp Senior Managing Director Manus Clancy said in the report. “After the rate fell nicely in January and February, we were cautiously hopeful that we’d be wrong.
“This month’s report shows that the market has a lot of wood to cut and that a rate north of 10 percent can’t be ruled out.”
Driving last month’s deterioration was multifamily loan delinquency, which jumped 74 BPS from February to 15.39 percent.
A 37-basis-point increase was recorded for office property mortgages, which had a rate of 9.41 percent last month.
After that were mortgages secured by retail properties, which increased to 8.24 percent from 8.00 percent in February.
Also increasing were late payments on industrial property loans, with the rate rising 17 BPS to 12.54 percent.
Delinquency on lodging loans, a category that suffered the most with the onset of the recession, was down 42 BPS from February to 10.63 percent. Lodging delinquency has fallen each month since October 2011, when the rate was 14.12 percent.
