For the fifth consecutive month, securitized commercial real estate loan performance has worsened thanks to a wave of maturing loans.
Thirty-day delinquency on loans that are included
in commercial mortgage-backed securities stood at 4.76 percent as of July 31.
CMBS delinquency moved up from the end of the previous month, when the rate was 4.60 percent.
The 30-day
delinquency rate on securitized commercial mortgages has now moved higher every single month since February of this year, when it was 4.15 percent.
That is according to historical data from Trepp LLC, which released the latest numbers Tuesday.
Trepp explained that while low interest rates, compressed cap rates and strong demand for CRE assets, as well as rebounding property values, had many believing that the impact from maturing 10-year loans made in 2006 and 2007
would be more limited than once feared — the much anticipated “wall of maturities” is now being felt.
“While we still believe the final body count for the ‘wall’ will be on the low end of the original dire expectations, the ride certainly won’t be bump-free,” the report stated. “The July delinquency report highlights one of those bumps, as the delinquency rate moved higher again thanks to another up tick in maturity defaults.”
Still, loan performance has improved compared to the same month last year, when the 30-day rate was 5.42 percent.
The most month-over-month deterioration was with securitized office building loans, with delinquency soaring 47 basis points to 6.23 percent last month.
Multifamily CMBS loans saw the 30-day rate surge 16 BPS to 2.51 percent in July.
A 4-basis-point rise from June in delinquency on securitized retail property loans left the rate at 5.76 percent.
Performance on lodging loans in CMBS improved, however, with the 30-day rate declining 15 BPS to 3.27 percent as of July 31.
The best month-over-month improvement was with securitized industrial property loans, which saw the 30-day rate tumble 32 BPS from June to 5.63 percent.
