Driven by an improvement in hotel and apartment loans, monthly delinquency on securitized commercial real estate loans took a turn for the better. Performance was impacted by new issuances and ballooning mortgages.
The rate of delinquent payments on loans included in commercial mortgage-backed securities was 9.37 percent in February. The rate was based on loans that were past due at least one month.
Delinquency tumbled from 9.52 percent in January. A year earlier, the 30-day rate was 9.39 percent.
Trepp LLC, which reported the data, called the latest activity a “sharp decline” and said the rate now matches its 12-month low. Part of the improvement was attributed to new CMBS issuance.
“Some of the overall improvement in the February delinquency rate, however, can be attributed to a change in status of approximately $900 million of loans,” the report said. “These loans are past their balloon date but are current in interest payments, and thus no longer classify as delinquent.
“Had these loans factored into the overall delinquency rate, the rate would have been 10.57 percent — —up 22 basis points for the month.”
Trepp Managing Director Manus Clancy warned that the ultimate resolution of past-due balloon mortgages will determine where CMBS delinquency heads this year.
On a dollar basis, $56.4 billion in CMBS loans were behind on their payments, less than the $57.7 billion in delinquent loans the previous month and also lower than the $61.8 billion in past-due loans during February 2011.
Last month’s delinquent loan resolutions amounted to less than $1 billion, “significantly off” from $1.6 billion in January.
The property type with the highest delinquency, multifamily, declined to 14.65 percent from January’s rate of 15.39 percent.
But CMBS loans secured by industrial properties surged to 12.37 percent from 12.14 percent.
After that were lodging loans, which tumbled to 11.05 percent from 12.09 percent, then mortgages secured by office properties, which worsened to 9.04 percent from 8.90 percent.
Late payments on retail properties climbed to 8.00 percent from January’s 7.88 percent.
