Led by industrial property loans, late payments on securitized commercial real estate loans fell as signs suggest the peak has passed. But office and retail property delinquency grew.
Past-due payments of at least 30 days on loans that are included in commercial mortgage-backed securities ended August 2017 at 3.02 percent.
Late payments on securitized CRE loans improved by 2 BPS from the preceding month. But CMBS delinquency has worsened from 2.95 percent the same month in 2016.
Morningstar Credit Ratings LLC reported the metrics.
Morningstar said that it believes the diminishing supply of legacy CMBS loans likely means delinquency peaked at an 18-month high of 3.19 percent in June.
In line with Morningstar’s analysis, Trepp LLC recently reported that 30-day CMBS delinquency declined another 4 BPS in September.
Sixty-day delinquency on CMBS loans was reported by Moody’s Investors Service at 6.66 percent as of Aug. 31, improving 6 BPS from July 2017. The improvement was attributed to the resolutions of 2007-vintage loans.
Morningstar’s report indicated 30-day delinquency on CMBS loans secured by industrial properties was 5.07 percent, plunging from July by
40 BPS — more than any other property type.
On CRE loans secured by hotels, delinquency dropped 34 BPS to 3.27 percent.
No change from the previous report left healthcare delinquency at 2.08 percent as of Aug. 31.
At 0.48 percent, the 30-day rate on multifamily CMBS loans was 5 BPS higher than in July.
The Aug. 31 thirty-day rate on securitized office building loans was 6.78 percent, rising 7 BPS. Morningstar noted that suburban office market weakness will continue to make the District of Columbia and Chicago the weakest overall markets.
On securitized retail property loans, the rate jumped 8 BPS from a month earlier to 6.45 percent, Morningstar said.
In Moody’s report, 60-day
office delinquency deteriorated 19 BPS compared to July to 9.07 percent, while multifamily delinquency was unchanged at 2.84 percent.
