Delinquency on loans included in commercial mortgage-backed securities continued to deteriorate, though conditions could soon begin to improve.
Securitized commercial real estate loans that were at least 30 days past due accounted for 3.19 percent of all CMBS loans outstanding as of June 30.
Last month’s level of delinquency worked out to the highest rate since December 2015,
when the 30-day rate was previously reported at 3.43 percent.
The performance metrics were provided by Morningstar Ratings LLC based on $769 billion in CMBS it rates.
Morningstar blamed loans securitized during the peak years of 2006 and 2007
that failed to pay off at their term dates.
The New York-based ratings agency noted a post-crisis low for CMBS delinquency of 2.76 percent in February 2016.
Thirty-day delinquency was 3.09 percent as of May 31, 2017, and 2.86 percent as of mid-2016.
“While the delinquency rate could inch higher, Morningstar believes it is near its peak, as there are fewer CMBS loans left that we expect to default at maturity, resolutions remain high,” the report stated, “and issuance has picked up, which would increase the denominator for calculating the delinquency rate.”
A 15-basis-point jump in delinquency on CMBS loans secured by office buildings left the 30-day rate at 6.75 percent as of mid-2017. Also up 15 BPS was multifamily delinquency to 0.61 BPS.
Delinquency on securitized healthcare loans inched up a basis point to 2.04 percent.
A 1-point month-over-month decline left the rate at 3.30 percent on hotel CMBS loans and 5.68 percent on securitized industrial loans.
The rate on retail property loans was 6.32 percent, receding by 2 BPS from May.
