The late-payment rate on securitized commercial real estate loans dipped, with office building loans improving most. Maturing loans continue to be a concern.
Delinquency of at least 30 days, including foreclosures, on loans that are part of commercial mortgage-backed securities landed at 2.95 percent in August.
Last month’s past-due rate on securitized CRE loans
was 1 basis point less than in July, when the delinquency had worsened by 10 BPS from a month earlier.
An improvement of 66 BPS has been made in CMBS delinquency versus August 2015.
The performance statistics were reported by Morningstar Credit Ratings
LLC based on the $791.94 billion in CMBS it rates.
“Since March, the delinquency rate rose 12 basis points, pushed higher by the declining payoff rate for maturing loans,” the report stated. “Morningstar Credit Ratings LLC expects the maturity payoff rate to continue to slide and drive the delinquency rate higher, as poor underwriting and a decline in cash flow may cause a significant portion of aggressively leveraged legacy loans made between 2006 and 2007 to face difficulty refinancing.”
Compared to July, last month’s 5.72 percent 30-day rate on securitized office building loans was 26 BPS less — the biggest month-over-month decline of any property type.
Multifamily delinquency dipped a basis point to 0.57 percent in August.
On CMBS loans secured by healthcare properties, the rate inched up 1 basis point from a month earlier to 2.51 percent.
An 11-basis-point increase on securitized hotel loans left 30-day delinquency at 3.00 percent.
At 5.47 percent, delinquency on retail property loans worsened by 20 BPS.
CMBS loans secured by industrial properties had a 30-day rate of 4.67 percent as of Aug. 31, soaring 35 BPS from the prior month.
