A sharp decline in hotel late payments led overall delinquency on securitized commercial real estate loans to the lowest level in nearly two years. Apartment loan performance, however, deteriorated.
As of Feb. 28, delinquency of at least 30 days on loans that are bundled in commercial mortgage-backed securities worked out to 4.51 percent.
In addition to sinking 32 basis points from January, last month’s rate has fallen for eight consecutive months and was the lowest it’s been since May 2016, when 30-day delinquency was 4.35 percent.
The rate was 5.31 percent as of Feb. 28, 2017.
Trepp LLC, which reported the data, said in a note that delinquency has receded consistently since June 2017 as most of the bubble-era loans from 2006 and 2007 passed their maturity dates and were resolved.
“As the rate gradually slid downward, we predicted that future declines were likely as the wall of maturities period was coming to a close,” the ratings agency said. “We still stand by that call and believe that further reductions are likely in store for the next few months.”
In fact, Trepp says it’s now possible over the next few months that 30-day delinquency could fall below February 2016’s post-crisis low, which was previously reported at 4.15 percent.
At 3.23 percent, delinquency on hotel CMBS loans plummeted from January 2018 by 128 BPS — more than any other property type.
Last month’s rate on securitized office building loans plunged 38 BPS to 5.46 percent.
A 14-basis-point decline from January left the 30-day rate at
6.16 percent on securitized retail property loans as of February 28.
Thirty-day delinquency on industrial property CMBS loans decreased 6 BPS to 5.54 percent.
Only multifamily delinquency deteriorated — worsening 32 BPS to 2.40 percent — though the rate was still the lowest of all property types.
