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CMBS Delinquency Continues to Improve

30-day rate down 24 BPS in September

Oct. 2, 2013

By Mortgage Daily staff

For four consecutive months now, the rate of past-due payment on securitized commercial real estate loans has retreated. Leading the latest improvement were mortgages secured by office properties.

Commercial mortgages that were at least 30 days delinquent accounted for 8.14 percent of CRE loans included in commercial mortgage-backed securities during September.

The 30-day delinquency rate fell from 8.38 percent the previous month. Delinquency has fallen each month since May, when the rate was 9.07 percent.

CMBS delinquency has plummeted 185 basis points from September 2012.

The performance data was reported by Trepp LLC.

Of the Trepp-rated portfolio, $1.7 billion in CMBS loans became newly delinquent, $1.9 billion were cured and $0.9 billion had loan resolutions --leaving the dollar amount of delinquent loans at $44 billion last month.

"The CMBS market managed to shrug off concerns over QE tapering, Syria, and impending government budget issues in September," Trepp Senior Managing Director Manus Clancy said in the report. "Supporting the improvement in the rate was a slowdown in new delinquencies and the addition of new deals to the overall loan pool."

Last month's biggest improvement came from office loans, which had a delinquency rate of 9.31 percent versus 9.60 percent in the previous report.

After that were CMBS loans secured by retail properties, with the 30-day rate dropping 26 BPS to 6.50 percent.

Multifamily loans had a rate of 11.13 percent, 1 basis point better than in August.

The next-best performance was with industrial property loans, which had a 30-day rate of 11.59 percent compared to 11.51 percent a month earlier.

The rate on lodging loans climbed 12 BPS to 9.15 percent.

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